The Bank of England has cut interest rates to 4% - its fifth reduction since last August.

Reacting to the news Douglas Grant, group chief executive of Douglas-based Manx Financial Group, said: ‘While the decision to cut interest rates offers some relief, the broader environment remains tough for UK small and medium-sized enterprises.

‘Ongoing cost-of-living pressures and geopolitical instability continue to erode business confidence.

‘Recent research from Manx Financial Group shows that nearly a third of UK SMEs have had to pause or shut down parts of their operations due to a lack of finance over the past two years.

‘Meanwhile, 38% expect no growth in the year ahead, up from 25% in 2024, highlighting the urgent need for a more stable and inclusive lending environment.

‘Despite these headwinds, SMEs remain resilient and ambitious. With the right backing, they believe they could grow by up to 13% over the next year. This is a pivotal moment, not just to avoid stagnation, but to ignite broader economic renewal.

‘To unlock this potential, we urge the UK government to adopt five urgent policy priorities.

‘First, support exports and manage currency risk by widening access to international markets and providing financial tools to help SMEs navigate global volatility.

‘Second, strengthen supply chains and digital scalability to boost resilience and unlock new trading opportunities.

‘Third, reform credit access and incentivise investment in digital and green technologies, making it easier for SMEs to raise capital.

‘Fourth, modernise tax and pension systems to foster innovation, attract capital, and reflect the needs of a modern, agile economy.

‘Finally, launch a national digital skills accelerator to address workforce gaps in AI, tech, and green industries, key sectors for future growth.

‘SMEs operate in a landscape reshaped by economic, political, and technological change.

‘Business leaders must adapt their strategies to navigate risks and seize opportunities.

‘Accessing affordable credit and leveraging monetary easing will be critical. With decisive action, the government can help unlock the full potential of Britain’s SMEs, and in doing so, bolster the UK’s long-term economic strength.’