The announcement today (8 October) by the Bank of England’s Monetary Policy Committee that interest rates are to be cut by 0.5% to 4.5% will be good news for farmers, experts believe.
The decision was due to be announced tomorrow, but was brought forward in a coordinated move with other major central banks.
“This drop in the cost of borrowing is a real boon to farmers who have seen input costs rise dramatically during the past year,” Paul Spencer, agriculture director for Lloyds TSB Bank and the Agricultural Mortgage Corporation said.
“Regardless of the sector they operate in, all farmers have had to deal with increasingly high costs for essential commodities. And with many also facing the prospect of substantial tax bills in the New Year, today’s cut in interest rates will provide some welcome relief,” he said.
“Looking to the future, we believe that further interest rate reductions can be expected which will help to restore consumer and business confidence and further reduce some of the financial burden currently facing the UK’s agriculture sector.”