Small firms fear long-term effects from cost of living crisis

Most small UK firms fear the long-term effects of the cost of living crisis. Half are worried high prices will cut spending, and three in four fear long-term damage to their business.

The cost of living crisis, soaring energy bills and rising inflation are causing many small and medium-sized businesses to grow concerned.

• 51% of SMEs concerned increasing prices would decrease consumer spending
• Over a quarter of firms fear increasing their own prices would make them less competitive
• Almost half of SMEs are pessimistic about the outlook for the UK economy

The first quarter of 2022 saw more than half of businesses reporting rising sales in comparison to the final three months of 2021.

This data is backed-up by an increase in debit and credit card payments to SMEs. This saw a 20% increase in value of payments and 35% increase in volume during the first quarter of 2022 compared with pre-pandemic levels.

Article by The Guardian