In business we always need to consider when is the right time to take an action. On Friday 3 May 14 the BOE (Bank Of England) acquired extra powers to manage the main UK lenders to take heat out of the housing market. The effect won’t impact most businesses yet but this Is just another step that will over time lead to a slow down.
This leads me to the main impact to SME Businesses. Analysis leads us to speculate that the zero BOE interest rate will move. Not until late 2015 I would suggest but the effect will be dramatic. Consumers are now completely acclimatised to very low bank rates for their most significant buy, their mortgage. There are less and less of us that recall the effect of Norman Lamont’s 17% interest rates of the Early 1980’s. While I wouldn’t be the nay sayer to predict the occurrence of another recession I would go as far as to predict a doubling of interest rates hitting many households with 6-7%. While that would, most likely be over several years the first impact of many would inevitably lead consumers to react, in deed this is the motivation behind the BOE power grab.
The effect on business could be dramatic and leads to my plea. Now has never been a better time to grab the financial summer. In fact I have told my clients for the past year that it is summer now. In fact often business miss the signs, only buying the sun hat and cream after the best of the warm weather has gone. We are well into the best of it and now is the time. Autumn will come but I predict not until late 2015. Followed by a much harsher winter.
Make sure your business made the most of the current opportunity to capitalise NOW while business is good and getting better.