Comment from Scott Dawson, Head of Sales and Strategic Partnerships at DECTA on Bank Rate Hike by Bank of England

“In an effort to slow the rise in the cost of living in the UK, the Bank of England has increased bank rates to the highest level for 15 years. However, the continued rise of UK interest rates is putting pressure on businesses in several ways. Slower economic activity could lead to lower demand for goods or services, businesses might be facing higher borrowing costs, and even if they’re not impacted directly, there could be second-hand impacts due to the increased prices of goods from suppliers, for example.”

“This heightens the need for businesses to implement a back-to-basics approach to business to bolster their resilience to an increasingly challenging economic landscape. While businesses should always be considering the holistic costs of services, not just the headline price, the need to manage upfront expenditure will inevitably become more of a priority in order to adapt to the current economic climate. If businesses cannot afford your services, they simply won’t be using them regardless of the long-term benefits or efficiencies that they may provide.

“This need for more aggressive short-term planning will also require focus on reducing costs through measures such as streamlining operations, reducing staff costs, and negotiating better deals with suppliers. They can also invest in energy efficiency to help reduce overhead costs. In the long term, the need for understanding the overall cost and value of goods and services is still fundamental. Commercial offerings need to support short terms goals while still providing long-term value. But, by being mindful of these dynamics, businesses can weather the storm and emerge stronger on the other side.”