The Bank of England held its regular meeting to discuss interest rates last Thursday.
They voted to hold interest rates at 4.5% as had been widely expected prior to the meeting.
The Bank targets an inflation rate of 2% and has already predicted that inflation will rise this year before dropping at the end of the year. However, inflation for the 12 months to January 2025 increased to 3.0% from 2.5% in December, a much higher and faster increase in inflation than had been expected.
The Bank have been taking a cautious approach to reducing the rate, and more cuts are expected during 2025. However, with the increases in the amount of national insurance paid by employers and national minimum wage rates taking effect in April, the Bank is having to tread a fine line between slowing price rises and risking damaging the economy by having rates too high.
Have you reached a point where the idea of running a business feels like more than just a pipe dream? Perhaps you have identified a gap in the market, you want greater independence or your side hustle is telling you that it has the potential to become a full-time income.
The end of the 2025/26 tax year will soon be here, which means a few additional tasks to carry out on your payroll, if you run one.