With the news that interest rates will rise to 1.75%, many business owners will be worrying about how this will impact their business.

The current cost of energy and fuel prices, alongside the general rising cost of living, means any further increase in costs will really squeeze finances.

The obvious answer is that an increase in interest rates means the cost of borrowing is higher.

Any fixed borrowing should be fine for now, but any variable rates will lead to higher repayments – credit cards being a big risk.

This will apply both to any business borrowing, but could also increase the amount business owners need to withdraw on a monthly basis to cover their personal costs.

Increased cost of borrowing could be passed on by landlords with higher rent payments.

It could also affect the value of the pound, impacting those businesses that import or export goods, and could lead to borrowing being more difficult to obtain as lenders see loans as more risky due to higher repayment costs.

Looking at any costs that will be affected and building that into your short term forecasts will give an idea of the additional cost to your business.

Once you have an idea of the likely increase in costs, you can start to plan the impact and how you can best mitigate this.

Start mitigating by speaking with Roake & Cook about your finances. We can help you get a grip on your incomings and outgoings, plan for how to make the most of your money in the future and move forward as a business.