Falling CPI Does't Mean SMEs Are In The Clear

15th February 2023

Alan Thomas, UK CEO at Simply Business (simplybusinessco.uk), one of the UK's largest providers of small business insurance, said "Naturally, the fall in inflation rates and recent news that the UK has avoided a recession is welcome, but we cannot rest on our laurels when it comes to supporting the UK's 5.5 million small businesses.

"There continue to be a number of elements at play which are disproportionately harming the SME community. Our research indicates that 65% of SME owners see rising costs as their biggest challenge, almost a quarter are concerned by supply and material shortages caused by ongoing geo-political unrest, and many are resultantly being forced to implement price increases, slow their plans for expansion, and even stop hiring.

“Our research also shows that a quarter of SME owners are worried that they, quite candidly, will not be able to pay their bills this year. If that concern materialises, then we will be in seriously dangerous waters.

“The Prime Minister set out as a priority for the government to halve inflation, which was welcomed by many. However, inflation is still at the highest level that we have seen in years, and many small businesses do not have the luxury of waiting another six months for things to stabilise.

“Alongside all of these new challenges, the detrimental legacy of covid lives on - one in six SMEs believe they will never financially recover from the impact of the pandemic. With ever-increasing energy prices and a cost of living crisis now hitting owners hard, many are rightfully calling for swift and long-lasting financial support from the government."