The Federation of Small Businesses is “deeply concerned” at the warning from Royal Bank of Scotland that it cannot rule out charging businesses to deposit money in future.
RBS and NatWest business customers have been told in a letter that if the Bank of England were to cut interest rates below zero, businesses might have to be charged an interest rate instead of being paid one.
Mike Cherry, national chairman at the Federation of Small Businesses (FSB), said: “The warning from Natwest and RBS will be deeply concerning to small firms. FSB’s latest research shows small business confidence is already at a four- year low. Firms are less optimistic, cutting headcount and curbing investment intentions.”
Mr Cherry added: “When the Monetary Policy Committee meets next week to decide on interest rates, we would call on them to do everything possible to consider the implications of changing interest rates for smaller firms and the self-employed looking to maintain or grow their business.”
Amid concerns that banks, whose margins will be squeezed by even a 0.25 per cent cut at next week’s Bank of England meeting, are softening up businesses for a rise in charges generally, Mr Cherry went on: “It is now vital that all finance providers holding deposits from small businesses do everything they can to update customers concerned about any changes to their Business Current Account (BCA) during this uncertain economic period.
“We would also encourage small firms themselves to take action and consider whether it’s worth switching to a more competitive BCA. One resource to consider is the Business Banking Insight website.”
Virgin Money has said it is postponing the launch of its lending offering to SMEs. But start-up rival Atom Bank said it would not desert customers. Its managing director of business banking Craig Iley said: “Now is the time for the banking industry to support these companies and individuals who are key to the future of our economy and the global economy. ...Atom is committed to supporting other small businesses to grow, and to continuing to grow our SME lending offering via our panel of hand-picked intermediaries.”
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