Rotherham businesses will suffer if interest rates rise, warns expert

Paul Moorhead said talk of the benefits of a rise was indicative of the widening gap between north and south.

“Mark Carney, the Governor of the Bank of England, predicted when he visited Rotherham in the spring that interest rates would rise but that rise now looks like it will come sooner than expected,” said Paul, the founder of Rotherham-based insolvency and specialists Moorhead Savage.

“The original prediction was for a rise soon after Christmas but the latest inflation figures suggest that rise could come as soon as this autumn,” he said. 

“The risk is that the cost of borrowing will increase and it may be that people who have maintained relatively high levels of borrowing because at the moment it is affordable, will suddenly finds that payments becomes increasingly difficult to keep up.

“At the same time as the greater cost of borrowing, wages are also rising and that will mean further pressure as overheads increase.”

Mr Savage said there was little sign of that upturn in the Yorkshire region.

“In South Yorkshire particularly I don’t see much evidence of genuine optimism,” he said.

“We are still seeing people come to us saying that times are difficult and many businesses are still getting into debt and having to go bust as a result of these continuing hard times.

“The sectors which are really growing are financial services and parts of the property market and both these sectors tend to favour the south east, with the preponderance of companies located inside the M25.

“In the north of England there are still many manufacturing based businesses and it is these businesses that are still struggling, especially as the strength of the pound is limiting their ability to export.”