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Many small firms fear long-term repercussions of UK cost of living crisis | cost of living crisis

Three-quarters of small and medium-sized companies are concerned about the long-term impact. cost of living crisisRising energy bills and rising inflation will affect their business, a survey found.

Just over half (51%) of SMEs said in response to Barclays’ quarterly SME Barometer survey for the bank that they were concerned that rising prices would reduce consumer spending.

Rising energy bills and higher raw material costs put pressure on businesses and create a challenging trade environment.

More than a quarter of the 574 firms surveyed said they feared raising their own prices in response would make them less competitive.

They reported that a tight labor market is putting more pressure on businesses, with some having trouble hiring new staff. Recently, companies in various industries, kindergartens with night clubsthey reported problems in finding workers to fill vital roles.

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But the four-day bank holiday weekend for the Queen’s platinum anniversary provided a rare bright spot for SMEs, who say they believe sales will increase during the holiday.

end of may bank holiday Moved to June 2It is taking an extended hiatus from then to June 5, as part of a year of events that marks the first time an English monarch has been on the throne in seventy years.

Independent pubs, pubs and restaurants expect sales growth of around £76m during the anniversary celebrations on Thursday and Friday.

Businesses responding to the Barclaycard survey predicted the festivities would increase their revenue. Six out of 10 SMEs said they forecast 10% higher sales on average between April and June compared to the same quarter of the previous year.

Hospitality and entertainment businesses also expect quarterly revenues to be one-third (35%) higher than in 2021 when they reopened as Covid lockdown restrictions were eased.

While some SMEs were positive about their prospects, around half said they were pessimistic about the overall outlook for the UK economy, while two-fifths reported the current business environment as unstable.

Perception of business prospects and stability has dropped since the first quarter, well below the levels recorded in early 2021 despite a period in which many coronavirus restrictions are still in place.

Businesses’ concerns about the future economic environment follow the successful first quarter of the year, with more than half reporting increased sales compared to the last three months of 2021.

These figures are supported by debit and credit card payments to SMEs, which saw a 20% increase in value and a 35% increase in volume between January and March compared to pre-pandemic levels, according to figures from Barclaycard Payments. He said the large increase in spending with SMEs can be attributed, in part, to the accelerated transition from cash to card payments witnessed during the pandemic.

Colin O’Flaherty, Head of Barclaycard Payments SME, said: “After an extremely difficult time for the hospitality and leisure industry, it’s encouraging to see revenue growth for businesses over the past few months despite the challenging economic climate.”

Ross Robinson, owner of The Queens Pub and Hotel in Lytham, who will be hosting a Jubilee event, said the extra bank holiday should give the business an opportunity to take advantage of the warmer weather and people’s desire to get out.

“We hope the public will use this time to support businesses in their area, helping drive sales at a time when the overall costs of running a business are the highest in years,” he said.

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