SO here we go again. The Bank of England is succumbing to pressure from the Government and moving interest rates up when there is no need to do so.
This is a perfect storm for small businesses which already have to cope with rising inflation and wages, plus soaring energy prices and bank margins.
Throw into the mix a ridiculous VAT level of 20% on food and accommodation and it’s no wonder that many hard-working business operators are asking themselves: Why am I doing this?
The Bank of England also appears to have forgotten its own pledge to encourage lending to small businesses.
Raising interest rates could well force some small businesses into bankruptcy. As a former international banker – and I hate to say this – it means more profit going into the coffers of large companies. And, of course, it means the banks are rubbing their hands with glee as customers rush to take any lending margin going.
In my opinion, it all adds up to “Armageddon” policy for small businesses.
But let’s make sure ridiculous bank margins used to refinance banks’ reserves are maintained on the proviso of risk – get real.
I am a fan of Mark Carney but come on, let’s support small businesses which, incidentally, saved the economy during the banking crisis. Europe, as Mr Carney knows only too well, especially Germany, has big issues.
If we can ask for one thing to balance the perfect storm, what about reducing VAT on food and accommodation and levelling the playing field so we are paying the same as our competitors in Ireland, where the rate is 9%.
But then what do I know? I only have 23 years’ experience as an international banker followed by 23 years’ experience as an hotelier.
And for the record, it was easier being a banker.