SME bosses expecting a rise in interest rates

Britain’s SMEs are expecting a rise in interest rates in the first half of next year, according to a survey conducted by accountancy firm MHA MacIntyre Hudson. The US Federal Reserve recently made the decision to increase bank base rates, whilst interest rates in the UK have remained at 0.5 per cent since 2009.

MHA MacIntyre Hudson’s poll found that over a quarter of Britain’s SMEs expect rates to rise in April next year, whilst 6 per cent expect a rise in January and 7 per cent from February. Around three quarters are expecting an initial rise within the first six months of 2016.

Current rates

The survey showed that whilst SMEs expect rates to rise, four fifths of SME bosses have not tried to fix their current rates with lenders or banks.

Rakesh Shaunak, chairman of MHA MacIntyre Hudson, stated that UK rates are more likely to rise in the New Year following the US Federal Reserve’s decision to increase bank base rates.

“Our poll found that the over a quarter of our clients are expecting a rise next April, but there are also around another quarter who are expecting rises from August or later,” he said.

Changes

In addition to an increase in interest rates, MHA MacIntyre Hudson also recently highlighted many other changes that will be introduced in upcoming months in its autumn 2015 statement. These included changes to the Small Business Relief Rate, which will be extended for a year from the 1^st April 2016.

The company also discussed the introduction of the apprenticeship levy in April 2017.

“Apprenticeship levy will be 0.5% of employer's wage bill, but employer will get a £15,000 allowance to set against this. Only employers with wages bills of over £3 million will pay the levy,” the company explained.