Cost of living crisis: Most businesses say they'll hike prices as 1 in 20 consider closing

10 February 2022, 07:05

Most businesses are ramping up prices because costs are going up while one in 20 companies quizzed for a new report are considering winding up.

The British Chambers of Commerce [BCC] poll found three out of five are putting up their prices.

Of the 1,000 businesses surveyed, half are cutting costs while one in five are scaling investment back.

Meanwhile, around 5% are thinking about stopping trading.

With the UK facing inflation woes and a cost-of-living crisis, the report spells bad news for consumers whose pockets already look set to be squeezed.

Energy prices look set to soar this year after issues in the supply of gas.

The BCC's director-general Shevaun Haviland has warned Chancellor Rishi Sunak of the problem and called for assistance.

Read more: Will everyone follow Boris? Scotland and Wales face mounting pressure to scrap Covid rules

'It's a con - a buy now pay later scheme. A dodgy loan, not a proper plan.'

She 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.

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"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.

"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."

Chancellor Rishi Sunak explains the measures to ease the energy crisis

Mr Sunak has unveiled measures designed to help households with their bills - including knocking off £200 from energy bills, which will be paid back at £40 a year over five years from 2023.

A £150 rebate, non-repayable, will be available to England's council tax payers and councils will get £150m to help people in trouble.

"We can take the sting out of this significant price rise for millions of families," Mr Sunak said when announcing the package.

Jonathan Reynolds, Shadow Business Secretary, said: "The Conservatives' cost of living crisis is hammering businesses, shops and factories pushing up prices for consumers and placing Great British firms at risk.

"The Government must listen to firms and workers and stop the national insurance rise which is a tax on jobs for businesses already struggling with higher costs.

"Labour would deal with the cost-of-living crisis for consumers and businesses - bringing down energy bills, introducing a £600 million contingency fund for businesses struggling with energy costs paid for through a one-off windfall tax on oil and gas producers."