The Bank of England’s latest interest rate increase has been described as a “bitter blow” to the farming industry.
The Bank of England has raised its base rate for only the second time in a decade, increasing from 0.5% to 0.75% It is at its highest level since March 2009.
Whilst good news for savers, chartered accountants Saffery Champness has described the rise as a “bitter blow” to farming.
This is namely due to the industry facing reduced yields from harvest because of the exceptionally dry weather and increased prices for winter feed for livestock.
Alison Robinson, Partner at Saffery Champness explained: “Input costs have already risen significantly - fertilizer, feed and the cost of energy all rising since Brexit, and the uncertainty that continues through the EU/UK Brexit talks has done nothing to restore confidence. In fact the opposite.
“Farmers, where they have borrowings and if they have not done so already, need to talk to their banks and their advisors and plan how to mitigate against the impact of this latest rise, whether to reduce borrowings or move them from variable to fixed rates if this upward trend for interest rates is to continue, and to plan how best to fund future planned investment in order to sustain their business objectives,” she said.
Mark Carney, the Bank's governor, said there would be further "gradual" and "limited" rate rises to come, according to the BBC.
