Traders’ mixed response to interest rate cutBy Hugh Fort
January 14, 2009
Retailers and businesses in Wokingham have welcome the Bank of England's decision to slash interst rates to a historical low.
The grand organisation slashed interest rates by a further 0.5 per cent to 1.5 per cent - the lowest in its 315-year history - last week in a bid ot drag the country out of recession.
Traders and businesses across Wokingham say the latest cut is a positive step forward and will benefit the borough but some have expressed doubts over whether it will be to the advantage of everyone.
Mark Ashwell, owner of TradeMark Windows in Fishponds Lane, said: “It is a difficult one to judge because interest rates have gone down but are the banks going to release money at the same rate?
“Established businesses have got a good relationship with their bank manager so with interest rates going the way they are its important people can still try and encourage further investments.
“This is an urgent situation for Wokingham. Marks and Spencer is staying put but Woolworths has gone.
“A decrease in interest rates has been made because the Government is urging us to take risks to try and get the economy back on track.
“But these proposals are only going to help the more established businesses and probably not those businesses starting out or looking to set up.”
The Wokingham Chamber of Commerce representative went on to reveal Wokingham Borough Council’s scrutiny committee is to hold a meeting on Monday to discuss issues affecting local businesses while the economic problems continue.
Neil Ashford, owner of Flower Corner in Broad Street, which has just opened a new stand at The Oracle in Reading, has welcomed the decision to decrease interest rates.
He said: “It will be good for businesses because encouraging the banks to start investing and helping businesses in the borough is great.
“I think we will have to wait and see if it makes any change to the economy because it all depends if the banks start to lend again.
“If they can be seen to make some movements then it could be the start of an improvement.”
The decision to cut interest rates triggered an emotive response from parts of the borough’s housing sector.
Vanessa MacNee, sales and marketing director for Persimmon Homes Thames Valley, said: “Whilst we welcome the interest rate reduction we sincerely hope lenders sit up, take note and pass on the cut in full to mortgage borrowers – the people who need financial help most.
“With many prospective buyers unable to finance their first or subsequent home we would like to see banks reviewing their tight lending criteria and have the confidence to again start offering loans to help kick- start the property market.”
The Federation of Small Businesses (FSB), which is at the forefront of a Wokingham Times-backed Keep Trade Local campaign to encourage shoppers to buy local, believes bigger problems lie within accessing finance.
Mary Flavell, chairman of FSB East Berkshire, said: “With rates now at their lowest ever level, small businesses are more concerned about access to money.
“The FSB would like a cast-iron guarantee the banks will not only pass on the interest rate cuts, but pass on the money to the small businesses that need it.
“The small business sector is the sector to see the UK out of recession in 2009 and into economic recovery, but this can only work if credit lines start flowing to viable businesses again.”