Small firm owners 'expect deflation' ? commercial mortgages

23 March 2009

The majority of small business owners feel that inflation will decrease or flatten out over the coming year, a new survey has revealed.

Research carried out by the Bank of Scotland has found that 66 per cent of those polled expect deflation to occur or for inflation to plateau in 2009, something that could have an effect on commercial mortgages.

However, 26 per cent of the small firm owners said that a period of deflation may turn out to be positive for their operations, with the researchers noting that it could lead to lower running costs.

And around seven out of ten (68 per cent) of the participants in the survey predicted that commercial property prices will continue to fall in future months.

"Small business owners are now anticipating level or even possibly lower running costs over the coming year," commented spokesperson Donald Kerr.

Meanwhile, a study by Lloyds TSB has revealed that there has been a 16 per cent improvement in the number of firms expecting turnover to rise in the next six months.