Weak pound forces businesses to raise prices
Since the UK voted to leave the EU in June last year the pound has fallen by 16% against the dollar.
As a result, a new survey by the British Chamber of Commerce (BCC) reveals that companies are readying themselves for cost increases in 2017. More than half of the business owners who took part in the study admitted that they would be pushing their prices up to counterbalance bigger overheads.
What the survey found
Of the 1,500 businesses surveyed, 44% said the UK’s depleting currency rate is having a negative impact on their business.
A weak sterling means that 68% of smaller businesses are expecting their costs to go up in 2017 and 54% are planning on bumping their prices up.
More unwanted news
The BCC’s Director General Dr Adam Marshall said, “The depreciation of sterling in recent months has been the main tangible impact that firms have had to grapple with since the EU referendum vote.”
Fifteen independent shops are closing on Britain’s high streets every day. It’s the fastest closure rate in four years, whilst the number of new openings is at its lowest in five years.
The terms of Brexit remain unknown, but what business owners are sure of is that things will get worse before they get better.
Next month when Philip Hammond delivers his next Budget we will have a better idea of how bad things could get.
The Budget will include details about the widely disputed rising business rates, the apprenticeship levy and the national living wage.
For some businesses, the details of the Spring Statement could be fatal. Analysis by The Federation of Small Businesses (FSB) found that the average small business employer will need to cough up £2,600 in additional employment costs in the upcoming tax year. For a lot of micro-businesses, that’s money they simply don’t have.
For more on small business rates and the Budget announcement, visit the Biz Hub.