Alison Robinson, a partner at Saffery Champness and a member of the firm’s Landed Estates Group comments on today’s Bank of England base rate rise to 0.75% and its potential impact on the farming sector.
“Today’s quarter of a percent interest rate rise will be a bitter blow to the farming sector, which in many areas is already facing reduced yields from harvest because of the exceptionally dry weather and increased prices for winter feed for livestock. 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 advisers and plan how to mitigate against the impact of this latest rise; consider 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.”