LAVA Advisory Partners: Bank of England decision comment

LAVA Advisory Partners: Bank of England decision comment

6 februari 2025

Rente Monetair beleid Verenigd Koninkrijk
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Hamish Martin, Partner at LAVA Advisory Partners, comments on today's upcoming interest rate decision. Reports are pointing to a cut being the likeliest outcome.

'The movement of the Bank of England's base rate typically has an impact on the M&A market, with today's cut potentially resulting in an uptick in activity. Lower borrowing costs make debt financing more attractive, encouraging both trade buyers and private equity firms to pursue acquisitions that might previously have been out of reach due to higher cost of capital.

The cut could also have an impact on valuations, as lower rates enhance the present value of future cash flows, making many targets more appealing. However, while this move has the potential to support deal-making, it’s not a fix-all – broader economic conditions, investor confidence, and geopolitical factors will still play a critical role in shaping the market’s momentum over the coming months.'

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