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Interest Rates Cut to 4.25%: What It Means for You and Your Business The Bank of England has just announced a cut to the base interest rate — down by 0.25%, bringing it to 4.25%. This is the fourth reduction since August 2024 and a signal that policymakers are looking to give the economy a bit of breathing space. So what does it mean for you, your household, and your business? Let’s break it down. Why the Bank Took Action The Bank’s Monetary Policy Committee (MPC) is tasked with keeping inflation in check while also supporting economic growth. Right now, the UK economy is showing signs of fatigue — sluggish growth and cautious consumer spending are dominating the landscape. In fact, the MPC predicts economic growth will slow by a further 0.3% over the next three years. Two committee members even pushed for a more aggressive rate cut of 0.5%, while others felt it was too soon to cut at all. The split decision reflects just how complex the economic picture is at the moment. Key Factors Behind the Decision Slow growth: The UK economy is expected to flatline through the rest of 2025. Global uncertainty: Concerns about US trade policy and the UK’s economic direction are dampening business confidence. Inflation: Price rises are still a major concern. The Bank expects inflation to peak at 3.5% in Q3, thanks largely to increases in council tax and utility bills. Employment pressure: The Chancellor’s recent £25bn increase in employer National Insurance contributions may push up costs for businesses and have knock-on effects for jobs and wages. A New Trade Deal – But Not Yet in the Forecasts Interestingly, the Bank made its forecasts before the UK government confirmed a new trade agreement with the United States, which reduces tariffs on cars, steel and aluminium. It’s too early to say how this might filter through to UK growth — but it’s a welcome development and something to keep an eye on in the months ahead. What Does This Mean for You? If you’re a business owner or property owner, the interest rate cut could affect your bottom line in several ways: Borrowing Costs May Fall (Slowly) Lower interest rates should, in theory, lead to cheaper loans and mortgage rates — though lenders don’t always pass on cuts right away. If you’re thinking about refinancing, it’s a good time to check your options. Inflation Still Biting Despite the rate cut, inflation is proving stubborn. Energy bills, council tax and general living costs remain high, and we’re unlikely to see inflation return to the Bank’s 2% target until spring 2027. Employment Costs Rising The £25bn employer NI hike could place extra pressure on small business budgets. It's important to factor this into your forecasts and revisit any assumptions about hiring or pay increases. Fragile Confidence = Cautious Spending Households are still being careful with their spending, which can affect sales and turnover for many small businesses. Strategic planning and budgeting remain vital. What You Can Do Now Here’s my advice: ✅ Review your cashflow: If borrowing is part of your strategy, now might be the time to explore fixed-rate options. ✅ Watch inflation-related costs: Monitor energy, tax and wage changes closely in your budgeting. ✅ Revisit your financial plan: The economic picture is evolving. Regular check-ins help keep you on track. ✅ Plan for slower growth: If you’re forecasting ambitious growth this year, it’s worth adjusting expectations slightly and looking for resilience as well as expansion. I’m here to help you interpret these changes and apply them to your specific situation. Whether you're managing rising costs, planning a big investment, or just trying to make sense of the headlines, let’s have a chat. 📩

Strategies for small businesses expanding abroad Practical steps to grow your business through exports. Thinking about exporting? Here’s what to know before selling overseas There’s a lot of talk right now about boosting the UK’s exports—and small businesses have a big role to play in that. The Government’s still aiming to hit £1 trillion in exports by 2030, and most of that growth is expected to come from owner-managed businesses just like yours. If you’re considering quoting for work in Dublin, Dubai or even Denver, you’re not alone. Recent figures from the Office for National Statistics show 22% of UK businesses with 10+ staff exported in the last year, and another 9% expect to start in the next 12 months. Thanks to digital tools and more streamlined customs processes, it’s easier than ever to reach new customers abroad. But let’s be honest: exporting isn’t just about finding new buyers—it comes with added admin, tax rules and paperwork too. That’s where I come in. As your accountant, I help make sure you’re financially ready, compliant, and able to grow without risking your cashflow. Here’s a practical guide to help you decide if exporting could be your next smart move—and what to consider before you dive in. Why exporting makes sense for small businesses Selling overseas might sound like something only the big players do, but there are real benefits even for micro businesses: Bigger market : Your product or service could reach customers with far more buying power than in the UK alone. Efficiency : Higher order volumes can bring your costs per unit down and justify investing in things like automation or product development. Resilience : Selling into multiple markets can cushion you against UK-specific economic slowdowns. In fact, the numbers are already shifting. In January 2025 alone, the value of UK goods exports jumped £1.8bn compared to the month before. Is your business ready? Before you say yes to that first overseas order, it’s worth checking a few key areas: Cashflow : Can you cover longer payment terms and increased stock levels without dipping into your overdraft? Turnover : Do you have at least a couple of years of stable income and profit? Time and headspace : Is there someone in your team who can handle customs queries and any extra admin? Legal protection : Have you sorted trademarks or patents in the markets you’re targeting? Customer service : Can you realistically manage returns or support if something goes wrong abroad? Product compliance : Do you meet the safety, packaging or labelling rules in your target country? We can help you run a quick financial health check and look at a rolling 12-month forecast to see if exporting is a good fit right now. The tax and compliance side Corporation tax For 2025/26, the small profits rate remains at 19% for profits under £50,000, and 25% for profits over £250,000. If your business is part of a group or you’re planning a branch overseas, we can run the numbers to check how profits are best allocated. VAT Goods sold to overseas customers are usually zero-rated—but only if you’ve got the right paperwork to prove the export happened within three months. For digital services sold to EU consumers, the non-Union OSS scheme can simplify VAT reporting across multiple EU countries. Customs and duties Getting Incoterms (those handy international trade rules) agreed up front is key. Everyone needs to know who’s arranging transport, who’s paying duties and where the risk passes. You’ll also need to include commodity codes, weights, and values on your commercial invoice, then submit a customs declaration through the Customs Declaration Service (CDS). If you’re trading with the EU, some goods may qualify for zero tariffs under the UK-EU deal, so long as you meet the rules of origin. If not, you’ll need to factor in duties when pricing your product. Keep all the documentation too—customs officers can ask for it years later. Import VAT This is normally paid by the customer, but offering Delivered Duty Paid (DDP) terms can smooth things over for them. You’ll act as the importer, register locally, reclaim VAT, and bill it back in sterling. Whatever route you take, keeping a tidy audit trail will save you a lot of stress. Staff and payroll Sending people abroad for short business trips might trigger tax rules in the host country. You can keep them on UK payroll, but only if you’ve applied for a short-term business visitor agreement with HMRC. Handling currency and payment risk Getting paid in another currency? Here are a few tools that can help you stay in control: Multi-currency accounts : Hold onto foreign currency until exchange rates work in your favour. Forward contracts : Fix a rate when the order’s placed, so you’re not stung by fluctuations later. Natural hedging : Where you can, match costs and income in the same currency. Structured payment terms : Get a deposit, split the payment in stages, or use letters of credit. Export credit insurance : This protects you if the buyer doesn’t pay—especially useful in higher-risk markets. We can build all this into your cashflow forecast, so you know the real risk before committing. Picking your first export market Choosing where to sell is just as important as deciding whether to export in the first place. Start by asking: Is there demand for what we offer? Do we meet the regulatory standards for the product? Is there a free-trade deal to remove tariffs? How reliable is the logistics—freight, flights, warehousing? How quickly do customers pay, and how easy is it to enforce contracts? What’s the country’s political and economic stability like? Target one market first, refine your pricing and process, then expand when you’re confident. Funding and support to get you started There are several programmes to help reduce the upfront costs of exporting: UK Export Finance (UKEF) : Offers guarantees for working-capital loans. UKEF export insurance : Covers up to 95% of a contract if the buyer defaults. DBT Export Support Service : Free advice on all things logistics, tax and compliance. Internationalisation Fund (England) : Match-funds things like market research or trade show costs. Growth Guarantee Scheme : Offers a 70% government-backed loan guarantee, extended to March 2026. Need help applying? I can pull together your accounts, forecasts and other figures to get things moving faster. Getting started—step by step Here’s a rough action plan: Set a target (e.g. revenue or number of orders in 12 months). Pick one market and do the research. Price your product accurately—including shipping and any duties. Get your EORI number and check VAT requirements. Sort your logistics and insurance. Secure cashflow support upfront—don’t wait until you're stretched. Monitor results monthly and adjust as you go. Final thoughts Exporting might sound like a huge leap—but it’s often more structured (and supported) than people expect. The rulebook is clear, the help is out there, and once you’ve got the right foundations in place, it’s just about getting out there and growing your customer base. If you’re ready to explore overseas sales, let’s chat . I’ll help you plan it properly, get the numbers right, and make sure the process is as smooth—and profitable—as possible.