Chancellor George Osborne announced in the Budget yesterday that the Monetary Policy Committee's remit will now include providing firmer guidance on the long-term future of interest rates, as has been done by the US Federal Reserve since 2011.
We welcome the chancellor's decision to provide UK businesses with longer-range information on possible changes in interest rates. This is a great way to encourage businesses to invest in assets to fuel growth, without costing the country a penny.
When businesses have more confidence that interest rates will be stable for a period of years, not weeks, they are far more likely to make capital investments in business assets.
Businesses can fix their borrowing costs with their lender through interest rate swaps, but for obvious reasons, that is currently an unpopular route.
If the Bank of England commits to keeping rates fixed for a long period, it will be a real shot in the arm for the UK economy. The periodic speculation about rising interest rates can be incredibly unsettling for borrowers, and this is a great way to avoid that problem.
The Budget might provide modest but welcome help for IT sales to SMBs. This should encourage businesses that have delayed much-needed investment in IT since the credit crunch to have the confidence to invest.
Longer-range guidance on interest rates means businesses will be more certain about their future costs when planning investment in business assets.
That can only be a good thing for the IT reseller market, where lack of confidence among business buyers is a major problem.
A lot of measures used by the Federal Reserve to try to foster US economic recovery have subsequently been adopted by the Bank of England.
While commercial borrowing rates are not solely determined by the Bank of England base rate – more often it is linked to LIBOR – a commitment to steady base rates is a very powerful message and should help to keep rates down across the market.
In fact, in the current climate, leasing provides an ideal mechanism or facility to fix the cost of an investment, providing predictability and a hedge against future rate increases.
Philip White is chief executive of Syscap
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View photos of last night's awards ceremony in London
View photos of all the winners from the 2018 Channel Awards
After a glittering awards evening in Battersea celebrating 25 years of the Awards, we are pleased to share the list of winners and judges' commended winners