Bank of England cuts interest rates to 3.75%

The Bank of England has cut interest rates from 4% to 3.75% today in a move to encourage spending and boost the economy.

This is the fourth cut this year and it will bring some relief to businesses across sectors against the backdrop of continuing economic challenges.

The ONS revealed last week that GDP contracted 0.1% in October marking the first three-monthly decline since December 2023. And unemployment has now risen to 5.1%.

In our sector, operating costs have outstripped inflation this year as we published last week in our Haulage Cost Movement Report, with Employer National Insurance increases part of the equation. And with interest rates remaining high it makes it hard for haulage, coach and van operators to borrow, which in turn stymies plans to invest in their businesses.

But lower interest rates should ease some pressure through stimulating consumer spending, with economists predicting more cuts next year.

However, we can’t just rely on the Bank of England’s interventions to boost the economy. They can help in the short term, but they should also be a reminder to policymakers that business needs foundations and confidence built on long-term stability to drive sustained growth.