PracticeConsultingACCOUNTANCY AGE BIG QUESTION: FDs disagree over interest rate hikes

ACCOUNTANCY AGE BIG QUESTION: FDs disagree over interest rate hikes

Finance directors are split on the issue of whether a further rise in interest rates would damage their business, according to this week's Big Question survey.

Produced by Accountancy Age, in association with Reed Accountancy Personnel, the survey of more than 200 finance directors revealed that 45% of FDs believe their businesses would definitely or probably be hit by an interest rate hike.

The Bank of England monetary policy committee has raised rates fourth times in six months and many economists are forecasting more to come.

‘We have already lost export business due to the strength of sterling and this will exacerbate this,’ said Aerospace Forgings FD Michael Sutton.

But some 44% of FDs said a further rise in interest rates would definitely not or would probably not affect their businesses.

Link Research FD Nick Rand said: ‘My business will benefit because I organise the cash flow so there is always surplus cash which earns interest. As a prudent chartered accountant, I prefer to having physical cash rather than speculating. However, on a national basis, interest rates rising will have an adverse effect on most businesses.’

Just 11% of FDs questioned remained neutral on the issue. ‘There are always winners and losers when the Bank of England raises the interest rates,’ said Paresh Samat, FD of SBJ ESS.

Safe pair of hands: Saatchi FD profile

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