UK Businesses Give Verdict On Rate Rise

In an exclusive survey for the Daily Mail, the Orange Business Jury, conducted by Ipsos, polled 604 decision makers in Britain's small businesses immediately following the Bank of England's decision, announced on the 5th of July, to raise UK interest rates from 5.5% to 5.75%.

Asked if they expected to have to make any changes to staff levels, nearly two thirds of businesses say numbers will not be affected and only one in ten think that they would have to make cuts (62% vs. 10% respectively).

The results of the poll show that:

• Almost two thirds of businesses think that the rates rise will make no difference to the value of the pound in relation to their business (63%).
• There was a three way split on whether the British economy will go into a recession over the next couple of years. A third (34%) say it will, a third say it won't and a third didn't know.
• On borrowing, most UK businesses didn't think that the interest rate rise would cause a problem. Four fifths (80%) said that their current level of borrowing was not a problem or not a very big problem. Only five percent saw their current level of borrowing as a very big problem.

Technical details

The Orange Business Jury is a panel of over 1000 small business owners, managers and decision makers working for companies with up to 250 employees. The panel is run by Ipsos. The survey is conducted using The 3rd Degree software tool, via SMS, and allows a fast response to issues as and when they affect the small business community. The study was conducted on the 5th July 2007, from 12.30pm following the Bank of England's rise in UK interest rates from 5.5% to 5.75%. Results are reported as at 4.00pm on the same day. The response rate was 62% for the questions asked.

Q1 If you had to guess, what do you think the level of UK interest rates will be this time next year?

Q2 Do you expect your headcount to increase or decrease over the next year, or do you expect things to stay around the same?

Q3 Would you describe the current value of the pound as a problem, an opportunity, or does it make no difference to your business?

Q4 Do you think the British economy will or will not enter recession over the next couple of years?

Q5 To what extent, if at all, is your current level of borrowing a problem for your business?