Staffordshire businesses may feel a ‘shock absorber’ following the Bank of England’s decision to lower interest rates to 4.25%, report the British Chambers of Commerce.

The rate drop comes amid a backdrop of weakening business confidence, driven by a combination of domestic tax increases, persistent cost pressures and uncertainty surrounding global trade relations.

SMEs in particular have reported growing strain in recent quarters, with many scaling back investment and freezing recruitment.

Responding to the news, David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: “Today’s interest rate cut to 4.25% will help absorb some of the shocks that businesses are facing on multiple fronts.

“Our research has been clear that SME sentiment has been falling since the twin developments of domestic tax rises and a global trade war.”

The BCC has highlighted the cumulative impact of recent national insurance hikes and ongoing inflation, with many firms calling for a clearer long-term tax strategy.

David added: “Many firms, desperate for financial respite, will be keen to see further rate cuts in the months ahead.

“The BCC has been calling for a tax roadmap to give firms some idea of when pressures will ease.”

On the global stage, a new framework deal announced between the UK and the United States is expected to provide a degree of investor reassurance. However, David warned that the broader consequences of the ongoing global tariff dispute remain unclear. “Progress elsewhere, such as the EU-UK reset and this week’s trade agreement with India will be significant, though their full impacts may take months to be seen.”

With economic conditions likely to remain unstable in the short term, the business community is urging the government to prioritise stability and ensure no further shocks disrupt the fragile recovery.

To find out more about how Staffordshire Chambers can support your business, please email info@Staffordshirechambers.co.uk