UK small businesses await impact of interest rate cuts as sales remain soft

UK small businesses await impact of interest rate cuts as sales remain soft

UK small business sales growth continued to slow over the last quarter (July to September), not helped by rising late payments times, according to the latest Xero Small Business Insights data from Xero, a global small business platform. 

Small retailers continue to experience weak sales growth, while hospitality had its softest summer sales growth since the pandemic lockdowns of 2020. Small businesses are yet to see the impact on consumer spending following the Bank of England’s decision to cut the official base rate by 0.25 percentage points in August and then by another 0.25 percentage points at the start of November to 4.75%.

The retail and hospitality sectors also had some of the slowest jobs growth this last quarter at +0.4 year-on-year (y/y) and -0.4 y/y respectively.

Small businesses experienced only a modest 1.9% y/y growth in sales for the September quarter, down from 4.5% y/y growth in the June quarter (April to June).

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