The Bank of England has today left interest rates on hold again despite increasing confidence that inflation has fallen back at its target level of 2%.

The central bank's Monetary Policy Committee (MPC) voted seven to two to hold the rate at 5.25%, the level it has been at since August last year.

Mike Randall, CEO of Simply Asset Finance, commented: “Rates have remained the same after a greater-than-expected drop in inflation last month.

“While a potential fall in rates could help to ease the financial burden on smaller firms in the coming months, elsewhere there are green shoots of economic recovery emerging. Just this week Lloyds Bank reported signs of the UK economy 'picking up pace', while small businesses are approaching 2024 with a renewed sense of resilience.

“Now, as SMEs now look to invest for the future, it's imperative we don't miss this opportunity to boost productivity and get the UK back on track to growth. For lenders, this means leaning into the opportunity, and maintaining an open line of support with businesses to ensure they have the funds they need for success."

Neil Rudge, head of enterprise at Shawbrook, said, "The Bank of England's decision to hold rates for a sixth time suggests a cautious approach.

"While a cut may be on the horizon sometime later this year, the Bank likely wants more data to confirm the inflation slowdown. This period of stable rates presents a valuable opportunity for businesses to reassess their plans but the positive signs of economic recovery should boost confidence for SMEs, potentially leading to increased investment and growth."