Rising energy prices 'greatest test for SMEs'
12 Aug 2022
Over half of small and medium-sized enterprise (SME) owners say rising fuel and energy costs threaten their business's survival, according to a survey published by insurance broker Simply Business.
Meanwhile, a third of SMEs polled said that tax and national insurance hikes are significant concerns. As a result, three in five small business owners are calling on the government to review or reduce the energy price cap, the survey said.
In addition, half of SME owners said that they are set to increase their prices to offset increased expenditure.
Commenting on the report, Jonathan Portes, Professor of Economics and Public Policy at King's College London, said: 'Apart from raising prices, the main response to these adverse pressures from businesses is likely to be to simply hunker down, reduce costs where possible and get on with it: that is, to pause expansion plans and, for those with employees, to cut back on hiring, hoping that conditions will improve over the coming year.
'Fuel and energy prices are by far the largest concern, and here the key drivers are global. However, UK conditions have been aggravated by both Brexit and the recent fall in the pound, which further pushes up energy prices, as well as by the operation of the energy market and the price cap.'