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UK: Rising cost of living spikes fear of long-term fallout among SMEs

UK: Rising cost of living spikes fear of long-term fallout among SMEs

Three-quarters of SMEs or small and medium-sized enterprises in the United Kingdom are reportedly concerned about the continued impact of the soaring cost of living, mounting energy prices, as well as growing inflation on their operations, reveals a survey.

In response to Barclays' SME Barometer, a quarterly assessment of company sentiment carried out for the bank, well over half (51%) of SMEs expressed concern that rising prices would reduce consumer spending.

Increasing raw material costs and rising energy bills are placing immense pressure on businesses across the UK and making trading more difficult.

Over a quarter of the 574 businesses polled expressed concern that partaking in raising their prices, as a result of the crisis, might make them even less competitive.

They claimed that a tight labor market is putting an additional strain on companies, with several unable to recruit new employees. Organizations in a number of sectors, from nightclubs to nurseries, have reported difficulty recruiting individuals to fill critical tasks.

The Queen's platinum jubilee, a four-day bank holiday weekend, on the other hand, presented an unusual bright spot for the small businesses, who predicted increased sales throughout the break.

The bank holiday in late May has been moved to 2nd June, allowing a longer vacation from then till 5th June as part of a year of celebrations honoring the first time a British monarch has been on the throne for 70 years.

At the time of the jubilee commemorations on Thursday and Friday, independent pubs, restaurants, and bars are anticipating a sales bump of almost £76 million ($95.8 million).

Companies that participated in the Barclaycard study projected an increase in income as a result of the festivities. Six out of ten SMEs stated they expected a 10% increase in sales from April to June as compared to the same quarter a year ago.

Revenues for leisure and hospitality companies are expected to be a third (35%) higher within the period of three months than they were in last year when they resumed after the pandemic constraints were lifted.

While several SMEs are optimistic about their personal options, nearly half are gloomy regarding the UK economy, and two-fifths believe the present business climate is unstable.

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.