IMF predicts UK interest rates to remain high in 2023 and 2024: what can freelancers do about it?

Nobody is giving freelancers bonuses or pay raises. It’s up to them to call the shots on pay to stay in line with inflation and the higher cost of living that has plagued the British economy. That’s easier said than done. We look at what the IMF predicts will happen with UK interest rates over the next 12 months and what freelancers can do to prepare

The International Monetary Fund (IMF) has predicted that UK interest rates will remain high in 2023 and 2024, as the Bank of England continues to try to bring inflation under control.

In its latest World Economic Outlook, the IMF said it expects UK interest rates to reach 5.5% from a current 5.25% by the end of 2023, and to remain at that level throughout 2024. This would be the highest level of interest rates in the UK since 2008.

The IMF’s prediction is based on the assumption that inflation in the UK will remain high for the next two years. The IMF expects inflation to peak at 10.25% in the fourth quarter of 2023, and to average 8.9% in 2024.

The IMF’s prediction is likely to be bad news for borrowers, who will face higher monthly repayments on mortgages and loans. However, it is good news for savers, who will earn higher interest on their savings.

What Freelancers Can Do to Survive the Rising Cost of Living

Freelancers are particularly vulnerable to the rising cost of living, as they do not have the same level of job security as employees. However, there are a number of things that freelancers can do to survive the rising cost of living, such as:

• Increase your rates: If you have not increased your rates in a while, now is the time to do it. The rising cost of living means that your clients are likely to be willing to pay more for your services. Even raising them by £25 to £50 could make a difference over the course of a month to cover credit card payments o food bills.
• Reduce your expenses: Take a close look at your expenses and see where you can cut back. This could involve cutting back on unnecessary subscriptions, eating out less, or shopping around for better deals on your energy bills.
• Find new clients: If you are struggling to find new clients, try networking with other freelancers or reaching out to potential clients directly. You could also try offering new services or expanding into new markets.
• Diversify your income streams: Consider diversifying your income streams by offering new services or working on different projects. This will help to reduce your risk and make you more resilient to changes in the market.
• Network with other freelancers: Networking with other freelancers can be a great way to find new clients, learn new skills, and get support. There are a number of online and offline networking groups for freelancers.
• Take advantage of government support schemes: If you are launching a new product or service that could satisfy the needs of your local community and beyond, you may be able to apply for a government grant for your business. Funding Database – UK Small Business Startups and Funding (ukstartups.org)

The rising cost of living is a challenge for everyone, but freelancers are particularly vulnerable. However, by taking even just a couple of the steps above, freelancers can increase their chances of surviving the rising cost of living and thriving in the future.

Additional freelancer tips to attract more clients

• Be flexible with your work hours and location: This will make it easier to find clients and projects that fit your needs. For example, it may mean working evenings for US Pacific coast or Asia-based clients until you find your rhythm.
• Invest in yourself: Take courses or workshops to learn new skills and improve your knowledge. This will make you more competitive in the market. Check out: What successful freelance songwriters can teach the rest of us about upping our game
• Build a strong online presence: Make sure your website and social media profiles are up-to-date and professional. This will help you to reach new clients and showcase your work.
• Get organised: Use project management tools and time-tracking software to stay on top of your workload and meet deadlines. Check out: Are Time Tracking Apps Worth the Money for Freelancers?