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Macair FMI Ltd

Contact: Macair FMI Ltd
Address: Unit 11 Maple Park Hoddesdon, London, Hertfordshire, EN11 0EX
T: 0800 093 3589
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Established in 1993 by managing director Rob McConachie Macair FMI Ltd is a reputable mechanical contractor specialising in all aspects of commercial heating,…

Listed in: Plumbing & Heating

Our accountants are currently forecasting a 2016 rate rise and you may have already read within the press that the Bank of England is expected to increase interest rates at the beginning of 2016. This is partly due to renewed growth within the British economy matched by stable job growth and wage increases. With this in mind it is very timely to consider what this means for you personally and what this may mean for your business.

First off the mark is the consideration of anyone with a mortgage (which I’m assuming is a large proportion of the UK population) and the potential impact of impending rates rises. There will be an impact on household budgets if rates do increase next year and those who may have stretched themselves with a mortgage debt may well struggle here more than others. I do suspect that a relatively small increase of 0.25% or even 0.5% will be absorbed well by the vast majority of households. However, this may not be the case if rates continue to rise over and above 1% or 1.5%. We shouldn’t forget that the base rate set by the Bank of England was circa 4% prior to the recession.

A second consideration is for any businesses who have taken out bank loans or overdrafts. Any variable lending is very likely to be impacted directly by an interest rate rise and this increased interest expense will need to be borne by the business. Business owners may benefit from sensitivity planning within forecasts to calculate the impact of increased interest payments on the bottom line and what this means for overall profitability. It will also be worthwhile reviewing and fully understanding any loans taken out to ensure that the impacts of a rate rise is fully understood.