The Impact rising interest rates has on employee wellness
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Rising interest rates have been the bane of everyday people for a while now and it looks like they are going to keep rising. This is a worldwide problem, so South Africa can simply add it to the list of economic woes cascading into household budgets. The South African Reserve Bank’s Monetary Policy Committee has increased the prime lending rate by 50-basis points from 10.75% to 11.25%. This decision will likely impact all South African consumers in one way or another – the vast majority of which are an employee in somebody’s business.
According to Hugh Hacking, Head of Structured Investments and Annuities at Momentum Corporate, higher interest rates impact businesses because they impact their employees. “In organisations, higher interest rates mean higher borrowing costs, leading to decreased profits and cash flow. This can, in turn, lead to a decline in investment and expansion, which can have destructive implications for employment growth and morale,” Hacking says.
According to Hugh Hacking, Head of Structured Investments and Annuities at Momentum Corporate, higher interest rates impact businesses because they impact their employees. “In organisations, higher interest rates mean higher borrowing costs, leading to decreased profits and cash flow. This can, in turn, lead to a decline in investment and expansion, which can have destructive implications for employment growth and morale,” Hacking says.
