Ahead of the Bank of England's latest decision on interest rates, Lloyds Bank Commercial Banking says that businesses are becoming less anxious over the prospect of a rate hike.
The Bank's Monetary Policy Committee announces its decision tomorrow (Thursday). But the net balance of firms expecting interest rates, which have been at the record low of 0.5% since March 2009, to increase before June has increased from 30% six months ago, to 40%. However, the proportion of companies that said that they were ‘very concerned’ about a rise in interest rates dropped slightly in the same period, from 16 to 14%.
And the number of firms expecting to take new or additional steps to protect their business against interest rate rises in the next six months also fell slightly, from 30 per cent to 28%.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “While expectations of higher interest rates have increased, our research shows that firms seem relatively relaxed by the prospect, having had further time to prepare for the first rate rise.
“While the Fed [US Federal Reserve] has already made the move to increase its interest rates, the MPC will want to be confident that the UK economy is ready for a gradual rise in rates sometime this year.”