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Home Business Consumers brace for higher prices as businesses pass on cost hikes

Consumers brace for higher prices as businesses pass on cost hikes

by uma

 

  • In early April 2022, over a quarter (29%) of trading businesses said their production and/or suppliers had been affected by recent increases in energy prices.
  • Accommodation and food service providers were most affected.
  • More than a third (36%) said they were having to absorb costs as a result of general price increases; 29% were passing the price increases on to customers.
  • Almost 28% of businesses said they had not been affected by price increases yet.
  • Approximately 15% reported that they had to change suppliers or find alternative solutions to get the materials, goods or services they needed from within the UK in March 2022.
  • Inflation remains the key concern for businesses.

ONS has released the latest Business Insights and Impact on the UK economy data: Business insights and impact on the UK economy – Office for National Statistics (ons.gov.uk)

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“Consumers need to brace themselves for rising prices as businesses increasingly say they are having to pass on cost increases to customers. A toxic mix of rising inflation, soaring energy costs and supply chain issues are placing businesses under increased pressure.

Over a quarter of businesses report they have been affected by energy price rises while 15% said they had to change suppliers or find alternative solutions to get the goods and services they need to stay in business. It’s a situation that is likely to only get worse as inflation continues to soar and we brace for further energy price rises in the Autumn.

After a bruising lockdown this is the last thing these businesses need at a time when they want to tempt consumers to get spending. Accommodation and food service providers were most affected by increases in energy prices – these were businesses particularly badly affected by the pandemic and having to hike their prices at a time when people are already starting to make budget cuts will be the last thing they need.”

 

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