Base rate cut is good for growth
The Bank of England (BoE) has today reduced the base interest rate to 5%, marking the first rate cut since March 2020. This decision, aimed at stimulating growth, is a positive development for the construction industry, which has long faced significant challenges including rising material costs, difficulty in securing steady pipelines of work, and increasing struggles to cope with the cost of planning.
Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said:
“The NFB welcomes the Bank of England’s decision to cut the base rate. From housing and commercial premises to renewables and roads, more affordable lending will help more projects get off the ground.
However, the clear message from today’s announcement was to not expect continued cuts, as the Governor of the BoE is cautious about cutting rates too quickly or by too much. This places greater pressure on the Government to deliver strategic reforms across planning, procurement, and regulation, which are essential to relieving some of the financial burdens that currently stop projects being delivered.”
