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Bank of England Cuts Base Rate to 4.25% – What It Means for Business Owners and Sole Traders

The Bank of England has cut the base rate to 4.25%, easing borrowing costs for business owners and sole traders and potentially reducing mortgage payments. CloudAccountant.co.uk partners with Cleerly to help self-employed clients access tailored mort

written by
Sam Stanhope Head of Marketing
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On May 8, 2025, the Bank of England reduced its base interest rate from 4.5% to 4.25%, marking the fourth cut since August 2023. This decision aims to support economic growth amid global uncertainties, including trade tensions and falling inflation, which currently stands at 2.6% .

What This Means for Your Business

For business owners and sole traders, this rate cut could lead to:

  • Lower Borrowing Costs: Reduced interest rates may decrease the cost of business loans and overdrafts, potentially freeing up capital for investment.

  • Improved Cash Flow: Lower debt servicing costs can enhance cash flow, allowing for reinvestment or savings.

  • Opportunities for Expansion: With cheaper financing, businesses might find it more feasible to invest in growth initiatives.

However, it’s important to note that while borrowing becomes cheaper, savings interest rates may also decline, affecting returns on business reserves.

Mortgage Implications

The rate cut is expected to influence mortgage rates, especially for those on variable or tracker mortgages. Homeowners may see reductions in their monthly payments, and new borrowers could benefit from more competitive rates.

Partnering with Cleerly for Mortgage Solutions

Navigating mortgage options can be complex, particularly for self-employed individuals and business owners. Our trusted partner, Cleerly, specializes in providing tailored mortgage solutions for contractors, freelancers, and sole traders. Their expertise ensures that your unique financial situation is understood and catered to, helping you secure the most suitable mortgage deals.

Whether you’re looking to purchase a new property, remortgage, or invest in buy-to-let opportunities, Cleerly’s team is equipped to guide you through the process with personalized advice and support.

Here are just some of the benefits of engaging with Cleerly:

  • Borrow up to 5x your income
  • Flexible income calculation for sole traders and company directors
  • Work with deposits as low as 5%
  • An excellent rating of 9 on Trustpilot
  • Their people are CeMAP qualified and experienced
  • A large number of bespoke agreements with major high street lenders
  • Over 98% of cases result in a mortgage offer

Need Assistance?

At CloudAccountant.co.uk, we’re committed to helping you understand and adapt to financial changes. Our team is here to provide clarity on how the base rate cut may affect your business and personal finances. Feel free to reach out for personalized advice and support. You can email us on info@cloudaccountant.co.uk  or give us a call on 01625 546 232.