Commenting on the UK CPI slowing to 2%, Ian Warwick, Managing Partner at Deepbridge Capital, said “While inflation may have slowed slightly to fall within the Bank of England’s target of 2% this does not mean that rates won’t pick up over the coming months. Many early-stage businesses will be thriving in the recently reopened economy, but they will continue to watch the debate around the decision on a subsequent rise in interest rates very closely as this will directly impact how much they are able to borrow at a crucial time. With inflationary pressure continuing it raises the question of exactly how long the Bank can hold interest rates at current levels before it is forced to step in, subsequently causing a problem for growing, early-stage companies who require access to funding as we focus on economic recovery. It therefore remains critically important that scale-up businesses, particularly in high-growth sectors such as digital technologies and life sciences are supported as they will be at the very heart of economic growth as we create an economy fit for the twenty-first century.

“Government initiatives such as the Enterprise Investment Scheme (EIS) have never been more important for helping entrepreneurs and innovators source the funding they require, whilst also offering private investors with tax incentives to develop UK-supporting private equity portfolios. With our EIS funds reaching record levels of funding in 2020/21 it is evident that there is considerable demand from investors and financial advisers alike to invest in early-stage UK companies which we believe will be at the forefront of our economic recovery.”