10 July 2007, 14:26 PM

  • UK independent retailers are set to come under pressure following the hike in interest rates to 5.75% last week, according to Alliance & Leicester.

“Additional pressure on profit margins is now a growing concern, especially for consumer-facing SMEs such as independent retailers, hairdressing and beauty salons, pubs and restaurants and hotels,” it said. “This is the fifth interest rate rise that has hit homeowners since last August, and this is starting to have an impact.

“Businesses must be proactive and control costs to protect their profits. Companies need to regularly review all outgoings to ensure they are operating as cost-effectively as possible, this includes their business banking arrangements.

“With small businesses in the UK wasting over £500 million each year by not shopping around for the best banking deal, getting maximum value from your bank has to be a top priority. This includes getting the best deal on your business current account and deposit accounts.

The report concluded, “Businesses should review any borrowing arrangements they have, to ensure they are getting a good deal. Business owners should also consider fixing the cost of any borrowing, as this will provide them with budgetary certainty.