SMEs at risk if rate rise materialises, says PwC
Small and medium-sized businesses in the Midlands “could be at risk” if interest rates rise during the first half of 2011. That’s according to private company experts at PwC, whose comments come in the wake of the dramatic drop in Gross Domestic Product (GDP) last week.
It was revealed that GDP had dropped by 0.5 per cent in the last quarter of 2010, a much larger fall than had been predicted.
PwC is warning that small businesses in particular will struggle to achieve growth in a negative economic climate.
Paul Norbury, partner and private business leader in the Midlands, said: “It is vital that interest rates remain low for the next few months as any rise could have a devastating impact on the region’s SME sector, which ultimately is the sector that will lead the recovery and create jobs in the future.
“Small and medium-sized companies in the region are finding it increasingly difficult to absorb cost increases and a rise in interest rates would undermine their competitiveness and growth potential further.”
