As if Coronavirus and Brexit weren’t big enough challenges already, UK businesses of all sizes and industries are now grappling with surging energy prices too.
Over the past few months, rising energy prices have quickly become one of the biggest obstacles that businesses are facing, on par with Brexit and Coronavirus.
Across the world, we are seeing the price of gas and electricity increase sharply while economies are trying to rebound. Everyone is feeling the effects of the surge in energy prices, but the results of our monthly UK Business Tracker found that businesses are also feeling the impact.
Over the past few months, rising energy prices have quickly become one of the biggest obstacles that businesses are facing, on par with Brexit and Coronavirus. 54% of UK businesses reported they have been negatively impacted by the rising energy prices.
This compares to 40% experiencing negative impacts due to Brexit, and 65% experiencing negative impacts due to the Coronavirus crisis.
The new expensive electricity bills are clearly top of mind for UK organisations. Of over 20 possible challenges presented to the UK businesses in our survey, energy prices were the number one significant challenge they expect to face in the year ahead. Even among the other emerging and growing challenges this year, such as supply chain issues and increasing threats of cyber-security, rising energy prices is now the biggest risk.
One in two businesses (48%) expect to increase their spend on energy compared to last year. As many businesses are going through digital transformation, with cloud-technology and data centres booming, the IT, technology, and communications industry is particularly predicting to spend more on energy (58% expecting to increase their spend on energy).
Unfortunately, as businesses are also battling Brexit and Coronavirus and trying to remain solvent, many will have to pass on the new costs to their customers. Nearly half of businesses think they will have to increase their prices to customers over the next year due to their rising energy bills. All sectors are predicting this need to increase prices, for example: Professional services (44%); retail & wholesale (48%); industrial/manual, e.g. manufacturing, construction, agriculture (53%).
The energy crisis is predicted to continue too. As much as the world wants to move to more renewable energies, realistically it won’t happen overnight, and we will still be reliant on gas and oil for the immediate future. When thinking ahead to the future, 78% of businesses agree that rising energy prices are going to remain a challenge.
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