What do bank rate hikes mean for my business?

In times of economic uncertainty, it can be difficult to keep up with the market, let alone consider how changes may affect your business.

On Thursday 11 May 2023, the Bank of England raised their interest rate (Bank Rate) by 0.25 percentage points to 4.5%, for the first time since 2008.

The effects of this and rate hiking in general have serious implications for businesses, regardless of whether or not you trade internationally.

With an increase in interest rates, businesses with existing loans, company credit cards, or mortgaged properties will likely find their repayments increase. Additionally, in an environment with higher interest rates, consumer habits are likely to change.

Higher interest rates ultimately make it more attractive to save money and less attractive to spend. Mortgage rates increase, so those on variable interest rates will find they have lower disposable income. As a result, businesses may well find their sales drop with consumers favouring saving in the short term. In the long term, those who’ve saved could be more likely to spend their accumulated savings once interest rates lower.

Every penny currently counts for businesses as the BoE continues their battle against inflation, with interest rates likely to continue to rise.

Ashley Salisbury, Senior Sales Manager at