James Burgess, Head of Commercial and Insolvency expert at Atradius UK, says:
“After years of waiting, businesses and consumers across the UK finally got some relief last month when rates were cut to 5%—the first decrease since 2020. But that relief was short-lived with today’s announcement of rates holding steady at 5%.
“As businesses and consumers brace for impact, especially after the welcome dip in August, it’s now more important than ever for companies to safeguard their finances against an unpredictable economic climate. With both interest and inflation rates creeping back up, uncertainty is in the air across the UK.
“Despite concerns over wage growth and rising inflation, there’s still hope. Many are looking to the Bank’s Monetary Policy Committee’s (MPC) next announcement in November, which could be a game-changer as we head into the end of the year.
“Our own claims data tells a positive story, showing a 17% drop in late and failed payments from Q1 to Q2 2024. Sectors like agriculture, electronics, and paper are thriving, with significant declines in claims in July compared to June—results businesses will want to maintain as we move into 2025.
“For now, businesses are focused on navigating the quieter autumn period and preparing for the all-important festive season. The economy is on a knife’s edge, and while we hope for another rate cut, the current unpredictability means businesses must stay vigilant. This includes boosting liquidity, diversifying supply chains, and securing trade credit insurance to protect against the ripple effects of insolvency.”
