Small firms relaxed on rate rises

Only 6% of small business founders said they were in it for the money

Only a tiny minority of small business owners are worried by the prospect of further interest rate rises, a Natwest/RBS study has suggested.

Issues which firms could influence caused far more concern than matters about the wider economy, it said.

Keeping profits on track and dealing with red tape were among the biggest worries identified by the 1,400 firms questioned in the survey.

UK interest rates have risen five times since August 2006 and are now at 5.75%.

The hikes have come as the Bank of England tries to rein in inflation closer to the government's 2% target.

Profit focus

After being hit by high energy bills and other costs, firms were generally optimistic about the year ahead with 49% expecting turnover to rise and 32% tipping profit margins to increase.

"Early indications also show that there is little out there to dampen this optimism," said chief executive of business banking at Natwest and RBS, Steve Pateman.

"In spite of the fact the research took place against a backdrop of rising interest rates, less than 1% of businesses expressed concern about those increases."

Other findings included only about 6% of those questioned saying that they started their venture to make money.

However, more than a quarter say that increasing profits is their main objective.

All the businesses quizzed for the study had an annual turnover of less than £1m.