Various business groups welcomed the Bank of England’s decision to freeze interest rates at 4.5%

According to the Forum of Private Business, a group that upholds the welfare of 25,000 small and medium-sized companies all over the UK, the Bank’s decision to retain the present interest rate levels will be a big help to the country as it can stabilise the strained national economy. The UK economy is taking a serious beating due to rising world fuel prices, which has brought fears of inflation.

Last August, the Bank of England cut the interest rate from 4.75% to its present rate of 4.5%. The previous rate has been in effect since August 2004. British businessmen earlier welcomed the interest rate cut as it could help jumpstart sluggish economic growth.

But the worldwide fuel crisis which greeted 2005 and which has worsened over the last few months had raised fears that officials may be forced to raise interest rates to counter the effects of rising oil prices.

Encouraging property values numbers and signs of movement in the manufacturing sector, however, have eased officials’ wariness and have led to their decision for the rate freeze.

Businessmen are now hoping that if domestic economic trends continue, the encouraging numbers may cancel out the effects of the fuel crisis and this may compel the Bank of England to mull over another interest rate cut. This is welcome development as this could further encourage entrepreneurs and businessmen to venture into new businesses . business solutions experts have expressed their opinions that lower interest rates will be a better business environment for entrepreneurs and new business owners.

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