A quarter of UK SMEs ‘set to put up prices to cover heightening energy costs’

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The challenge of how businesses can keep on top of ever-intensifying cost pressures is one of the topics that has dominated 2022, and it looks set to be something firms up and down the country will continue to seriously grapple with well into the New Year.

It is unsurprising, then, that according to a recent report from Insurance Business, a significant proportion of small and medium-sized enterprises (SMEs) in the UK will probably look to cover recent rises in energy costs by pushing up the prices they charge customers.

Businesses continue to have a range of cost management concerns and strategies

The news site cited a report recently issued by a premium finance company as saying that almost one in four – 23% – of SMEs will increase their prices in an effort to recoup energy costs. A further 17% of respondents, meanwhile, suggested that their strategy for reducing their costs would include lowering staff pay raises and not replacing workers who leave.

There was at least some reason for hope in the figures, a mere 4% of SMEs questioned, expressing fears that the situation may leave them having to cease trading. 8% of participants in the research, though, said they would be forced to cut jobs in order to maintain control over their business expenditure.

When polled on the question of what they could do to tackle escalating energy bills, 15% of businesses said they would look into arranging for more staff to work remotely, where this was possible. 12%, meanwhile, indicated that they would cut back on buildings and office space, and a further 5% of those surveyed stated that they would shut parts of their business.

The report also noted that the steep increases in energy costs could hinder SMEs’ ability and willingness to invest. 11% of such businesses quizzed indicated that they would cut back on investing, and 13% said they would postpone expansion plans. 12% of respondents stated that they would draw upon company savings as a means of making their energy bills more affordable.

Especially concerning, however, was the admittance by a whopping 38% of SMEs that they did not know how they would tackle the problem of rising energy bills.

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