Greater SME indebtedness in the Accommodation & Food sector (20 per cent exceeding half of turnover) may limit capacity to borrow more, but 44 per in this sector do not hold any debt, while 57 per cent of all firms do not hold any debt. 5. System-wide payment breaks offered by lenders provided important relief for many SMEs.
In the case of an increase in competition, monetary policy largely stays the course, leaving the policy interest rate essentially unchanged. For the fall in aggregate demand, both output and inflation decline, and the Taylor rule calls for a cut in interest rates to stimulate demand and bring inflation back to target.