Just under three quarters (73%) of firms say they are putting up prices in response to rising costs, according to a new survey by the British Chambers of Commerce.
The survey of more than 1,000 businesses, showed that firms across the country are under intense pressure from soaring energy, wage and raw material costs. It also revealed that 50% of businesses are seeking to reduce costs, 18% scaling down investment and 5% considering ceasing trading.
The British Chambers of Commerce has written to the chancellor calling for action to address these challenges with measures that includes a temporary energy price cap for small businesses, extending the energy bills rebate scheme for households to include smaller businesses and delaying the planned National Insurance rise by one year.
Director general, British Chambers of Commerce, Shevaun Haviland said: “Without help from the Treasury to weather this storm many businesses, especially smaller ones, will be faced with a nearly impossible situation that will leave them with little choice but to raise prices.
“Our research has shown that businesses were drowning in rising costs even before the energy crisis began to bite. This latest data reveals that companies are now also under extreme pressure from spiralling gas and electricity bills as well as increased wages. As you can see from our research, the majority are having to raise prices in response, though many are also being forced to scale back planned investment or cut other costs from their balance sheet.
“The Chancellor must implement our five-point plan to give firms a chance to stabilise without having to seriously increase their prices, cut jobs or the investment that is so vital to sustaining our economic recovery from Covid.
“Unabated, the surging cost pressures produced by the cost-of-doing-business crisis will continue to lead to increased prices and fuel the cost-of-living crisis currently being faced by people across the country.”