Flagstone banks relationship manager Katie Horne believes rising energy prices are the biggest concern for businesses after growth across Britain’s private sector slowed to a three-month low in September.
A reading of 51.7 for the month, down from 52.5 in August, was recorded by the S&P Global flash UK composite purchasing managers’ index (PMI), which is based on preliminary data from the manufacturing and services sectors.
Horne said: “Recent research by Flagstone among 1,000 UK SMEs found that 37 per cent of businesses rank energy prices among their top three financial challenges – making energy the single biggest concern across businesses of all sizes and the majority of industries, topping the list in nine of the UK’s 12 regions.
“Unlike households, businesses do not benefit from the domestic energy price cap, leaving many SMEs more directly exposed to movements in wholesale markets when their contracts come up for renewal.
“Energy is not a discretionary cost. Whether you run a factory, restaurant, shop or office, you need to keep the lights on and the business running. When those bills rise, SMEs have few places to hide.
“SMEs cannot control global energy markets, geopolitical events or what happens in the Strait of Hormuz. But the Government can look at how exposed smaller firms are to those shocks and whether the tax and levy burden on business energy is making the problem worse. The SMEs we speak to want business energy costs to be a Treasury priority in this October’s Budget.”
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