Ahead of the Bank of England's next rate decision, rebuildingsociety.com on what 'higher for longer' really means for small business borrowing

30 July 2026

With the Bank of England's Monetary Policy Committee due to announce its next interest rate decision on 30 July, having held Bank Rate at 3.75% since a cut last December, in our experience as a Leeds-based lending platform, small businesses shouldn't assume a stable base rate means stable borrowing costs on the ground.

The Bank of England has held Bank Rate at 3.75% at its last three scheduled decisions, with the Monetary Policy Committee split over whether the next move should be a hold or a rise, amid mixed signals on inflation. For small businesses, the headline rate is only part of the picture: the cost and availability of finance also depend on how individual lenders price risk, and on the wider trading conditions a business is operating in.

"A lot of business owners assume that if the Bank Rate holds steady, their own borrowing costs will too. It's more complicated than that. What actually determines whether a loan is affordable is the health of the business itself, and that's shaped by costs, wages and demand just as much as by what the Bank of England does on a Thursday."

Daniel Rajkumar, Founder & CEO, rebuildingsociety.com

Our loan rates are set against the credit risk of each individual loan rather than tracking Bank Rate directly, in contrast to many variable-rate bank facilities. In our experience, that means a hold or a rise in Bank Rate on 30 July won't automatically feed through to our own pricing, but it does affect the wider environment, costs, wage pressure and consumer demand, that shapes whether a business can comfortably service the finance it takes out.

Our message to small business owners ahead of the decision is a practical one: plan borrowing around a range of possible rate outcomes rather than a single forecast, and stress-test affordability against a less favourable scenario, not just the most likely one.

"We'd rather a business plan for a slightly worse rate environment than the one everyone's currently expecting and be pleasantly surprised, than borrow against the most optimistic forecast in the room. That discipline matters on our side of the loan too; it's exactly why we assess affordability the way we do."

Daniel Rajkumar, Founder & CEO, rebuildingsociety.com