Skip to main content
Practical employment law information to support your business, from Clover HR

Search

Establishing a successful recruitment process and clear written employment contracts for new employees can have a major impact on your business.

Every business needs to be aware of its obligations under minimum wage and equal pay laws, as well as recent pensions auto-enrolment changes.

You must comply with legal restrictions on employees' working hours and time off, or risk claims, enforcement action and even prosecution.

The right employment policies are an essential part of effective staff management. Make sure any policy is clear and well communicated to employees.

While sick employees need to be treated fairly, you need to ensure that 'sickness' is not being used as cover for unauthorised absence.

Most pregnant employees are entitled to maternity leave and maternity pay, while new fathers are entitled to paternity leave and paternity pay.

As well as undermining morale, illegal discrimination can lead to workplace grievances. Employee discrimination is covered by the Equality Act 2010.

Home, remote and lone workers are becoming increasingly commonplace. Key issues include communication and how to manage and motivate people remotely.

The right approach to consulting with and providing information to your employees can improve employee motivation and performance.

Disciplinary and grievance issues can be a major burden to employers. Putting in place and following the right procedures is essential.

Following the right dismissal and redundancy procedures helps protect your business and minimise the risk of a legal dispute at tribunal.

Employment tribunal claims are a worrying prospect for any employer. A tribunal case is a no-win situation – even if the claim is unjustified.

Could the Bank of England interest rate fall this week?

19 March 2024

Financial analysts predict that the Bank of England is likely to reduce interest rates in the coming months but will they cut the rate when they meet this week? Businesses are certainly hoping for good news but most economic pundits expect the rate to stay the same.

The Bank of England (BOE) has held interest rates at 5.5% for the past six months. Its next meeting is on Thursday 21 March. Despite predictions that BOE interest rates are likely to come down over the next year, there is no consensus on what will happen this week.

The Bank of England has to balance the needs of the economy while making sure that inflation doesn't creep back up. This month, the Office for Budget Responsibility (OBR) said it expected inflation to hit an average of 2.2% over the course of 2024 and 1.5% over the duration of 2025, before it climbs back towards the Bank of England's 2% target. If this happens, the OBR predicts that interest rates could fall to 4.2% by the final quarter of the year and 3.3% in 2025.

Businesses struggling because of high interest rates

A new survey of more than 1,000 UK businesses, conducted by the British Chambers of Commerce (BCC), has found that 33% say they are negatively impacted by the current Bank of England interest rate of 5.5%. Small and mid-sized firms (39%), manufacturers (36%) and business-to-consumer firms (37%) are more likely to report a negative impact.

The research shows that only 9% say they are positively impacted by the current interest rate - relating to higher earnings on surplus funds. The main negative effect cited by businesses was increased costs for new and current finance, which is either restricting investment or limiting cashflow. Firms also referenced a tightening in consumer spending and higher costs for COVID recovery loans.

However, the scale of the negative impact has fallen from 46%, when businesses were last asked the question in July 2023. Firms were also asked what they would set the interest rate at, if they were in charge, and 4% was the median average response.

"With all eyes on the Bank of England's [next] interest rate decision, our data is a timely reminder about the pain many businesses are suffering at the current level of 5.25%. Firms tell us every day that they are struggling to pay off debts, some dating from the pandemic, and finding it difficult to take out new loans. Expectation continues to mount that a cut in the interest rate is on the horizon, and this is likely reflected in the lower negative impact cited by businesses now compared to July last year. But with firms indicating that a rate of 4% would be acceptable, it suggests there is some way to go before the squeeze on companies' borrowing costs is relieved." Alex Veitch, BCC director of policy.

The last time the Monetary Policy Committee (MPC) met, on 1 February 2024, it decided to keep interest rates at 5.25%. Businesses are hoping for a different decision this Thursday.

Written by Rachel Miller.

Stay up-to-date with business advice and news

Sign up to this lively and colourful newsletter for new and more established small businesses.