Most small businesses fear long-term impact of UK cost of living crisis | Cost of living crisis

Three-quarters of SMEs worry about long-term impact cost of living crisisa survey found that soaring energy bills and rising inflation will take a toll on their business.

More than half (51%) of SMEs said they were concerned that soaring prices would dent consumer spending, in response to Barclays’ SME Barometer, a quarterly business sentiment survey for the bank.

rise energy bill Higher raw material costs are putting pressure on businesses and creating a challenging trading environment.

More than a quarter of the 574 companies surveyed said they were concerned that having to raise their prices in response would make them less competitive.

They report that the tight labor market is putting further pressure on businesses, with some struggling to recruit new employees.Recently, companies from all walks of life nursery to nightclubwhich reported problems finding workers for key roles.

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However, the four-day Queen’s Platinum Jubilee Bank Holiday Weekend provided a rare bright spot for small and medium-sized businesses, who said they believed sales would rise over the holiday period.

Bank holiday at the end of May Moved to June 2which has since been extended to June 5, as part of the year’s events, marking the first time a British monarch has ascended the throne in seven years.

Independent pubs, bars and restaurants are expected to increase sales by around £76 million during the jubilee celebrations on Thursday and Friday.

Businesses responding to the Barclaycard survey predicted the festivities would boost their revenue. Six in 10 SMEs said they expect average sales in the April-June period to increase by 10% compared to the same period last year.

Hospitality and leisure businesses also expect revenue in the three-month period to be a third (35%) higher than in 2021, when they reopened as coronavirus lockdown restrictions eased.

While some SMEs are optimistic about their own prospects, nearly half say they are pessimistic about the broader UK economic outlook, while two-fifths say the current business environment is unstable.

Sentiment around both the business outlook and stability has declined since the first quarter, well below levels seen in early 2021, even as many coronavirus restrictions remained in place at the time.

Businesses’ concern about the future economic environment comes after a successful first quarter of this year, with more than half reporting an increase in sales compared to the last three months of 2021.

According to Barclaycard Payments, the figures are supported by the volume of debit and credit card payments processed to SMEs, which increased in value by 20% between January and March compared to pre-pandemic levels, Transaction volume increased by 35%. It said the sharp increase in SME spending could be partly attributed to the accelerated shift from cash to card payments witnessed during the pandemic.

Colin O’Flaherty, Head of Small and Medium Business at Barclaycard Payments, said: “After an exceptionally difficult period for the hospitality and leisure industry, it has been encouraging to see business revenue growth over the past few months despite a challenging economic environment.”

Ross Robinson, owner of Lytham Queen Bar and Hotel, which will host the jubilee, said the extra bank holiday should give businesses a chance to take advantage of the warmer weather and people’s desire to get out.

“We want the public to use this time to support local businesses and help boost sales at a time when the general cost of running a business is at its highest in years,” he said.