Chamber members have given their reaction to the decision to cut interest rates from 4.25% to 4% last week.
Stephen Robinson (pictured), Corporate Finance Director at PM+M, says the cut is set to spark optimism across the deal-making landscape.
He adds: "The Bank of England's decision to trim interest rates is sending a strong signal to dealmakers: the transactional environment is heating up.
"By lowering the cost of capital, I believe the move will breathe fresh life into business sales, acquisitions, and refinancing efforts - all areas that have faced headwinds from months of elevated borrowing costs. Lower rates are set to ripple quickly through the lending market, improving debt affordability and making leverage-driven growth strategies, from organic expansion to M&A, far more attractive.
"Crucially, the rate cut could act as a catalyst for deals that have been paused or shelved in recent quarters, especially in sectors where high financing costs have been a barrier to execution.
"Market watchers, including myself, are already predicting a renewed appetite for M&A, with both private equity and strategic buyers likely to re-enter the arena with greater confidence. For business owners eyeing an exit, this shift could mean heightened buyer competition, stronger valuations, and more favourable deal outcomes.
"Beyond direct transaction dynamics, the move may also push investors to rethink capital allocation. As yields on safer assets come under pressure, capital could flow toward higher-return opportunities - including acquisitions and growth-focused investments that were previously sidelined.
"While the cut itself may be incremental, the message is clear: the UK’s investment narrative is turning a corner and the window for action is opening. Those prepared to move may find the market more rewarding than it has been in years."
Matthew Allen, Lecturer in Economics and macroeconomic expert at the University of Salford, has shared what the cut means for prices, savers, tax, and international pressures.
He says: “The interest rate cut will bring welcome relief to millions of borrowers across the UK. After years of steep repayment costs, this marks a turning point in the Bank of England’s approach.
"But while the interest rate cut is a positive development, it’s far from a clean bill of health for the economy. Inflation remains stubborn in key sectors such as services and food, and households are still grappling with the aftershock of prolonged price rises. For savers, falling rates also mean lower returns on deposits, potentially eroding household wealth over time.
"Meanwhile, Chancellor Rachel Reeves faces mounting fiscal pressure. Reports of a potential £50 billion budget black hole have sparked early speculation around future tax increases. Will a wealth tax be introduced or will there be further tax rise increases across the board?
"On the global front, the outlook remains complex. The ongoing wars between Russia and Ukraine, Israel and Gaza continue to disrupt markets and energy prices. Adding to this, further US tariffs introduced under Donald Trump’s trade policy, including new measures on imports from India, may ripple through global supply chains, increasing costs for UK firms and potentially reigniting inflationary pressures.
"While the UK economy has grown by 0.7%, these gains remain fragile. Employers are also continuing to face rising costs, with increases to employer National Insurance contributions and the National Minimum Wage likely to keep operational expenses elevated. At the same time, the UK labour market is cooling, which may dampen wage growth and reduce inflationary pressures, but also poses risks to household spending and overall economic momentum. This could lead some businesses to pass costs on to consumers, keeping inflation stickier than hoped.
"Today’s rate cut is a welcome signal of progress but it’s not a green light for complacency. The path to recovery is still narrow and surrounded by geopolitical and fiscal headwinds.”