Half of small businesses needing to raise prices for weak £

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Half of small businesses needing to raise prices for weak £

That’s according to a new survey by the British Chamber of Commerce (BCC), reported here in The Independent.

‘More than half of the UK’s small and medium-sized businesses say that they will have to raise prices over the next year because of the weakened pound’, it starts.

Plus, currency fluctuations are ‘likely to continue as the Brexit transition unfolds’, it quotes the BCC.

Rising costs and fluctuating currency

The survey, conducted by the BCC, ‘found that 68 per cent of 1,500 businesses questioned expect their costs to go up in 2017, while 54 per cent will increase the prices they charge customers’.

This is because of the weak and fluctuating pound.

‘The pound has slumped by around 16 per cent against the dollar since the UK voted to leave the EU in June 2016’, says The Independent, ‘causing the cost of imports to rise.’

This has been the major real challenge of Brexit so far, and is described by the BCC as a ‘double-edged sword’, says the paper.

‘Nearly as many exporters reported that it is damaging them as benefiting them’, the piece says.

Pressure on companies

The Independent quotes Dr Adam Marshall, Director General of the BCC.

‘While inflation rates aren’t high by historical standards,’ he says, ‘they are still putting increasing pressure on companies.’

Say you import from suppliers based elsewhere, for instance.

‘For firms that import, it’s now more expensive, and companies may find themselves locked into contracts with suppliers and unable to be responsive to currency fluctuations.’

The piece closes with his call on the Government to, as the paper puts it, ‘mitigate any negative effects’ of ongoing fluctuations by lowering costs to business such as what Dr Adam Marshall calls the ‘sledgehammer’ of business rates.

The Spring Budget happened on 8 March.

See the full piece over on The Independent.

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