Soaring costs forcing firms to hike prices

OVER a third of small businesses plan to raise their prices – to help them cope with their soaring costs, according to digital employee benefits and financial advice groupworklife.

It said that 36 per cent of small to medium sized enterprises (SMES) cited high inflation as one of the biggest concerns and challenges facing them over the next 12 months.

Twenty two per cent of SMES said supply chain problems, rising business rates and employee wellbeing were additional worries.

Aside from increasing prices, 31 per cent of SMES surveyed said they are looking to find cheaper suppliers. Nearly 20 per cent said that they were putting investment plans on hold, while 13 per cent said they were scrapping them altogether.

Worklife managing director Niamh Mclaughlin said: “The outlook remains unclear two years on from the first UK lockdown. Not only are smaller businesses feeling the effects of rising prices and bills, but they are also grappling with supply chain constraints and labour shortages.”

She added that although corporate budgets and cash-flow are under increased pressure, SMES need to make sure that staff pay and benefits packages are competitive and useful.

“How employers help staff manage the impact of inflation on their own finances could well impact on their decision to stay and strive to support the company long-term,” she said.

Elsewhere, on Tuesday the Office for National Statistics is expected to say the Government borrowed £17 billion last month, down from £26.9 billion for the same month last year.