Bank of England

Number of Self-employed Up 700,000 Since 2008

Number of Self-employed Up 700,000 Since 2008

The number of people registered as self-employed in the UK has increased by 700,000 since 2008 and now accounts for 15% of the UK’s workforce at 4.5 million, according to the Bank of England’s (BoE) report. The report concludes that this unrelenting growth in entrepreneurs is a result of technological and demographic changes, opposing concerns that a rise in self-employed individuals means that employment figures are not as healthy as they may initially be perceived. According to BoE’s analysis the boom indicates an increase in the number of low-paid, less intensive self-employment and not a struggling jobs market as just 4% of those registered as self-employed are looking for a job and there has been a rise in the number of entrepreneurs that earn £5,000-£7,500 a year. The BoE believe tha... »

Interest Rates Held at 0.5%

The Bank of England‘s Monetary Policy Committee has voted to keep the bank base lending rate at 0.5% and there will be no further quantitive easing. The decision comes as no surprise but the degree to which members of the MPC voted will only become apparent when the minutes of today’s meeting are published. The last meeting of the MPC saw two members vote for a rise in the base interest rate, which is becoming in increasingly likely as ways to rein-in inflation are sought. The last inflation rate figure, 3.7% in December 2010, is nearly double the target figure of 2%. With the UK economy in a surprise 0.5% decline for the last quarter of 2010, there are fears that economic growth could be stifled by high inflation, led by fuel and food prices, but the historically low interest ... »

Pay freeze “necessary” for economic recovery, says BoE

Businesses should not offer pay rises despite current high inflation or they could risk damaging the UK’s economic recovery, the Bank of England (BoE) has warned. BoE governor, Mervyn King, said that the current inflation rate of 3.7% (CPI) may increase to 5 % in the coming months, before dropping sharply in 2012. He cautioned employers against raising wages to counteract the effects of high inflation. “The squeeze in living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies.” He added that if the Bank of England tried to counteract the rising prices by raising interest rates, it would simply lead to falling wages and therefore the same loss in purchasing power, but at the expense of an even deeper recessio... »

Small Business Banking: Lending Continues to Fall

Today the Bank of England released its quarterly Trends in Lending statistics. The report revealed that the stock of lending to UK businesses contracted by around £5 billion in the three months to November. However, a contraction in September and October 2010 was partially offset by an increase in November, the first positive net figure for lending since February 2010. James Meekings, co-founder of Funding Circle, the innovative online social lending marketplace, had this to say about the latest figures: “These figures are another deafening blow to the banks’ claims that they are lending. Look even closer and you will see how situation is getting worse for small businesses – the stock of lending is falling faster and the interest rates being charged are putting them off applying for ... »

Interest Rates Kept at 0.5%

The Bank of England‘s Monetary Policy Committee has held the base interest rate at 0.5% for a record 18th consecutive month in a row. With continued concern over the state of the economy amidst sharp cuts in public spending by the new coalition government the decision was welcomed by David Kern, Chief Economist at the British Chambers of Commerce, who commented: “The MPC made the right decision by leaving interest rates and the quantitative easing programme unchanged this month. However, uncertainty over future interest rate policy is damaging confidence. Businesses cannot properly plan for recovery without clear knowledge that rate rises will be off the agenda for an extended period.” “Global risks of an economic setback appear to be worsening, so the welcome news ... »

Bank of England Maintains Bank Rate at 0.5%

Bank of England Maintains Bank Rate at 0.5%

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £125 billion financed by the issuance of central bank reserves. The Committee expects that the announced programme will take another two months to complete. The scale of the programme will be kept under review. The minutes of the meeting will be published at 9.30am on Wednesday 17 June. »

Interest Cut to Historic Low

The Bank of England cut the base interest rate again, this time by 0.5 percentage points from 1.5% to 1.0% The interest rate started at 5.5% in January last year, being cut to 5.25% in february then to 5% in April where the rate remained for half of the year. As the credit crunch took hold and Britain found itself heading toward recession the rates were slashed dramatically in an attempt to assist the economy. Now, at 1%, the UK interest rate is the lowest it has ever been and, meaning savers get poor returns but interest repayments on mortgages etc are considerably lower. Still, banks are loath to lend to Small Business despite the efforts of Government to provide enterprise finance schemes. For your interest here’s a list of the months where the interest rate was dropped over the l... »

Interest Rates down to 2%

As economists forecast the possibility of a deep recession the Bank of England‘s Monetary Policy Committee has, once again, decided to substantially cut interest rates. Today’s decision sees the interest rate fall by a whole 1% to the new base rate of 2%. Last month the MPC took the decision to slash the base interest rate by 1.5%, the greatest rate cut since the BoE was granted independence back in 1997. Ian McCafferty, Chief Economic Adviser at the Confederation of British Industry (CBI)said; “The economy needs a significant monetary stimulus and the Bank has clearly decided this will be best achieved by another big cut in interest rates. What is critical for business and consumers alike is that this reduction is passed on. The economy is stalling, inflation is expected... »


Groups call on Banks to cut costs

Business groups have welcomed the recent 1.5% Bank of England (BoE) interest rate cut, but warned that banks must reduce their borrowing costs for small firms to benefit. The BoE’s decision to cut interest rates from 4.5 to 3% has provoked a positive reaction from business groups concerned about the effects of the economic crisis. The Federation of Small Businesses (FSB) national chairman John Wright said that if the banks pass on the rate cut in full, it would result in a £750 million saving for small firms on the cost of their overdrafts and other loans. “All this will come to nothing if the banks do not follow through and pass on the rate cuts to those small firms struggling with increased costs of credit,” Forum of Private Business chief executive Phil Orford sa... »

Bank of England holds Interest Rate

The Bank of England‘s Monetary Policy Committee (MPC) has, once again, kept the base interest rate at 5 per cent for the fourth consecutive month in a row. The decision on whether to cut, maintain or increase interest rates has become increasingly difficult as The Bank of England has maintained a policy of "wait and see" with the state of the UK economy. After last month’s decision to hold rates at 5 per cent the minutes show that seven of the nine MPC members voted to hold the interest rate whilst one member called for a cut and one other for a rise in the cost of borrowing; that’s the first 3-way split since May 2006. The MPC admitted that the economy "remained fragile" in the midst of rising costs for small business, big business and consumers alike... »

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