The Bank of England have raised interest rates from 0.25% to 0.5% – the first increase for ten years.
The Bank’s rate-setting monetary policy committee (MPC) voted in favour of the increase seven to two at its regular monthly meeting.
The increase had been widely expected with commentators saying markets have already factored it in. The Bank said it now expected interest rates would rise gradually over the next few years.
Richard Mathews, CEO of Optimum Professional Services, said: “This is not good news for SMEs, whose owners and directors have loans and also mortgages. This may be a small rise but any increase in the current economic climate, which is not riding high for SMEs, will make things more difficult.
“The one consolation is indications are that there will be just two more ¼ percentage rises in the next two years, so by the end of 2019 the base rate should still be at just 1%.”
