The Bank of England has dropped its base rate again, now sitting at 4.25 per cent.

That is four cuts in a year, and there may be more on the way.

However, do not assume this automatically means good news for your business.

Yes, borrowing is cheaper, but that is not the whole story

If you have got loans linked to the base rate or are thinking about new finance, this change could reduce your repayments.

That might sound like a cue to invest in new kit, hire more people or expand, but tread carefully. Lower rates do not cancel out higher risks.

Plenty of businesses are still sitting tight, and here is why:

• Inflation is set to rise to 3.5 per cent. That’s going to eat into disposable income and hit demand.
• Lenders aren’t rushing to cut fixed rates. Long-term borrowing may still be expensive.
• The economy’s improving, but only just, and not enough for most firms to go all in.

In short, lower rates don’t remove uncertainty. They’re just one part of a much bigger picture.

Now is a smart time to check your footing

Before you take any big steps, make sure you’ve covered the basics:

• Run the numbers on your debt. Refinancing now might ease pressure down the line.
• Check your cashflow against possible shocks, price spikes, supply issues, slower sales.
• Reopen old plans with fresh eyes. Some ideas parked last year might make sense now.
• Think flexible. A phased approach could protect your cash position better than a bold leap.

Not everyone will gain equally

Some sectors might benefit more than others:

• Property and construction may get a boost from cheaper mortgages.
• Retail still faces weak demand, despite falling credit costs.
• Exporters may find international deals matter more than UK rate moves.

If you are unsure what this rate cut means for your business, don’t guess. We can help you weigh the risks and spot the opportunities specific to your situation. Contact us today.