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Bank of England cuts UK interest rates

04 August 2016 by
Bank of England cuts UK interest rates

The Bank of England has cut UK interest rates from 0.5% to 0.25% - a record low.

The move, announced today, is part of a range of measures designed to stave off a recession following the shock of the referendum result in June, which saw the UK vote to leave the European Union.

It is the first cut in interest rates since 2009.

The Bank of England has also announced the biggest cut to its growth forecasts since it started making them in 1992.

It now predicts that economic growth in 2017 will be just 0.8%, down from the 2.3% it predicted in May this year.

So far, predictions for how the Brexit vote will affect the hospitality sector have been mixed.

On the one hand, a weaker pound spells good news for some hotel businesses. The UK's travel and tourism industry is expected to be one of the first sectors of the economy to benefit from the Brexit fallout, according to an insolvency firm.

Red Flag Alert research for Q2 2016 from Begbies Traynor, released late last month, suggests that the British tourism industry was in a state of improving financial health in the three months leading up to the Brexit vote.

But confidence among the leaders of Britain's restaurant, pub and bar groups has dropped in the wake of the vote to leave the European Union, according to research by CGA Peach.

A July survey by the business analyst found concerns over consumer confidence, rising product costs and staff availability headed the list of worries for senior executives.

The survey of 80 board-level directors found just 15% of operators are upbeat about market prospects in the next six months, down from the 75% that registered market optimism in January as part of the annual CGA Peach Business Leaders Survey.

Post-Brexit worries hit market confidence >>

British tourism industry predicted to benefit from Brexit >>

Accommodation business confidence at a ‘record high', says VisitEngland >>

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