The Federation of Small Businesses (FSB) has sent results to the Bank of England of a snap poll demonstrating the devastating impact of the credit crunch, and is calling on its Monetary Policy Committee to cut interest rates this Thursday.
Figures released today from the FSB poll reveal that a majority of small businesses have seen their operating costs increase and trade reduced in the last year while most would back a reduction in interest rates by the Bank.
Over 80 per cent of respondents said their costs had increased in the last year and 46 per cent had seen a decrease in trade.
Costs for small business in the form of loans and overdrafts from high street banks have increased for 40% of respondents.
A worrying 51 per cent had seen an increase in their payment times from invoicing to full payment and this reflects the FSB’s concern that large companies are improving their cash flow on the back of their smaller suppliers.
The FSB is alarmed at the way that small business is being manipulated by larger companies especially over payment terms and considers that now is the time for the Bank Of England to ‘Set aside it’s worries over inflation and look to giving the economy a vital boost’ by reducing the interest rate.
Whether a half a percentage point cut would bear any significance is really hard to tell, but considering that massive cuts in the US appear to have had little positive effect, it would almost certainly not help the current slide in business growth.
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2 comments so far
1 Interest Rates » FSB Calls For Interest Rate Cut To Help Small Business // Oct 8, 2008 at 8:13 am
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2 Debt Relief // Oct 8, 2008 at 9:54 pm
Smart move!. If you want to keep the enjine running, small businesses are the ones who are going to pull us out of this mess. Thanks very much for the post!