Nine in ten (91%) UK SMEs have been forced to raise their own prices in order to keep pace with the soaring cost of living.
As UK inflation hits a 40-year high of 9.1%, research published by Time Finance showed one in five businesses fear they are struggling to remain competitive in the wake of rising costs. More than three fifths (63%) of firms have increased their prices by 10% and one in five have hiked prices by 30%.
Businesses cited soaring energy and utility costs and the rising cost of materials and stock as the two biggest threats to their business at the moment.
Ed Rimmer, chief executive officer at Time Finance, said: “It’s no secret that the cost of living is rising at a rapid and unmanageable pace of late. Our recent survey figures show first hand the significant impact that this is now having on both our small business network and only further amplifies the domino effect this has on consumers and local communities.
“As inflation continues to rise at an accelerated rate, the only option businesses have to deflect the detrimental impact and continue trading is to increase their costs. But with the interest rate now taking a hike consecutively month on month, the mountain of rising costs across the board are not sustainable for anyone. Something needs to change in order for businesses to not only survive but create jobs, inspire innovation and continue generating wealth for our economy.”
Time Finance said nearly 50% of business owners are considering switching to cheaper supply chains as a result but warned that this could worsen their circumstances by impacting the quality of products or services delivered.
Rimmer added: “Something’s got to give in the coming weeks and months for businesses to remain viable, as reactive changes to their service offering and increasing costs will only go so far in overcoming the challenges they face.”
