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News - 24 June 2014

UK Businesses Not Prepared for Rise in Bank Interest Rates

 A report, commissioned by Company Watch and consisting of 500 UK businesses, revealed that of those businesses that have factored interest rate rises; the biggest group at 40% are prepared for an increase of just .25%, followed by 30% who are predicting a .75% rise and finally 25% are factoring a .5% rise in their business’ financial plan.

 
Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“The survey, which was conducted by market research group OnePoll, also asked correspondents how they planned to cover increased charges. While 70% are currently in discussion with banks to lock-in current debt terms, 30% stated that they would consider changing lender to manage increased costs.”
 
Over half said they would try to cover the charges by increasing sales and a third plan to cut costs within the business to deal with the increase. Finally, only 3% confirmed they would allow the cost to transfer onto the business’ customers.
 
Director of Company Watch, Emma Caister, addressed the results and emphasised the importance of companies planning for how the rises will affect them and the wider circle that influence their business:
 
“Clearly with many companies in the Company Watch survey still feeling the effects of the long recession, even a small increase in debt costs might end up having a big impact on the strength of their businesses.
 
If you need any help and advice on Management Accounts, Budgets and Cash Flow Forecasts, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help in all your financial planning.
 
ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900 E-mail: abds@netaccountants.net
 
Brilliant with numbers  
Great with people  
Clear and precise with advice
Timely and cost effective
In touch with issues that face our clients
Mindful of our client’s long term strategic goals
 
Helping Your Business is Our Business

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