Rising interest rates to cost businesses extra £13.6bn

Interest rates are expected to increase over the next nine months, costing businesses an extra £13.6bn a year in loan interest payments, according to ACP Altenburg Advisory

Research by debt advisory specialists Altenburg found that UK businesses with floating rate loans currently pay £17bn annually in interest payments on their £381.1bn of floating rate debt, an average interest rate that currently stands at 4.5%.

Following the latest increase in the Bank of England rate on 22 September to 2.25%, the current market is expected to increase by a further 350 basis points (BPS) within the next nine months.

This would increase the value of loan repayments by businesses to £30.6bn, an increase of £13.6bn.

However, Altenburg said that market expectations of future interest rate movements are typically only accurate over a short-term horizon.

Your free features:

Breaking news and expert analysis
Customisable daily newsletters
Six free CPD learning modules each year
Personalised CPD tracker
Top 75 Firms league tables
Regulatory changes
Hardman’s Tax Data

Business | King’s Speech outlines closer trade ties with EU, less red tape

HR | Student loan repayment interest capped at 6%

Tax | 1.3m taxpayers paid £137m in late payment interest

Finance | Businesses need to adapt quickly in times of uncertainty

Tax | Nine ways to beat the Budget tax tsunami

Navigate

Tax Services

Your free features:

Sign up to Business & Accountancy Daily