Interest Rates, Brexit, and Business Finance – What You Need to Know

UK interest rates are falling, Brexit uncertainty lingers, and new business financing trends are emerging. But what does it really mean for your business?

Let’s break it down.

1?? Interest Rate Cuts: Opportunity or Red Flag?

The Bank of England cut interest rates last week in an attempt to stimulate economic growth, but at the same time, the UK’s growth forecast was slashed. Lower borrowing costs might seem like good news, but here’s what you need to consider:

?? For Business Loans & Financing: Lower rates could make it cheaper to borrow, meaning now might be a good time to explore financing options if you're looking to expand, invest, or manage cash flow.

?? For Currency & FX: Lower interest rates often mean a weaker pound, which impacts international transactions and FX costs. If your business deals in multiple currencies, now is the time to review your FX strategy.

?? For Overall Stability: The slashed growth forecast signals uncertainty. While borrowing may be easier, economic instability could impact demand, investment, and business confidence - so staying agile is key.

What to Do Now:

• If you're expanding or investing, now could be a cost-effective time to secure funding.
• If you operate internationally, watch GBP volatility and use FX solutions to lock in stable rates.
• If your business is cash flow-focused, ensure your payment terms and incoming payments are structured to maintain liquidity in uncertain times.

2?? Brexit, Five Years Later: The Impact Continues

Brexit still defines the UK economy - and will for years to come. Five years on, businesses are still facing challenges with trade, supply chains, and financial services.

?? For Importers & Exporters: Trade friction remains a real challenge for businesses moving money, goods, and services between the UK and Europe.

?? For UK-Based Companies Working with International Partners: Regulatory uncertainty still lingers, and while some industries have adapted well, others are seeing increased costs and delays.

?? For Financial Services & Payments: London remains a financial hub, but post-Brexit financial regulations are evolving. Businesses must ensure they’re working with providers that understand new compliance requirements and cross-border challenges.

What to Do Now:

• Review cross-border payment efficiency - if you’re still relying on slow, costly methods, there are faster and cheaper options available.
• Ensure compliance - if your business moves money internationally, check that your processes align with the latest financial regulations.
• Plan ahead for currency risk - GBP and EUR volatility could still impact trade, so stabilising FX costs can help protect margins.

3?? Business Financing Trends – Are You Missing Out?

A staggering six in ten businesses are missing out on financing options they could be using to fuel growth, manage risk, or increase stability. Many businesses are unaware of what’s available or assume traditional banks are the only option, according to new data from independent lender, Time Finance.

What’s Changing?

? Alternative finance & fintech solutions are becoming more mainstream.

? More businesses are turning to Open Banking for real-time payment insights and access to better financial products.

? Fast, digital-first payment solutions (like Pay iO) are helping companies gain more control over cash flow.

What to Do Now:

• Explore new financing & cash flow options - beyond traditional banks.
• Use fintech tools to improve financial visibility and liquidity.
• If you’re not using Open Banking yet, consider how it could give you faster, more efficient control over your business finances.

What’s Next?

Watch for FX volatility - especially after the interest rate cut.

Explore alternative finance - if you’re looking for smarter ways to fund growth.

Stay ahead of Brexit-related financial changes - especially if you trade internationally.

The financial world is moving fast, and businesses that stay informed and adaptable will have the edge.