One in five small companies within the UK is in danger of closing because of the increasing cost of living. The most at risk areas include areas like the West Midlands and the North East as per new figures.
The the London-based business financial platform Tide discovered that businesses are experiencing increasing difficulty in tackling the rising costs of operating.
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The data from Tide showed that approximately 70% of companies had to expand their hours, with around a third of businesses relying on support from family and friends to remain in business. The study also revealed that one out of 10 small businesses has been forced to make reductions in staff.
The most significant expense for businesses that were studied was energy and fuel as well as the issue of supply chain and inflation.
The cost of fuel and energy have reached record highs in the past year. The ongoing conflict in Ukraine aggravating the problem.
Also, inflation has reached a worrying levels currently sitting at 9.1 percent, but it is reported that the Bank of England has warned that it could rise up to 11% later on in the year.
The research highlighted it as the West Midlands as the most susceptible to business closure, followed by North East, the South West, Scotland, and the East Midlands.
Small-scale businesses are an integral part in the UK economy, and evidently they’re finding it extremely difficult in the current macroeconomic environment,” said the CEO of Tide, Oliver Prill.
Prill demanded the government to increase its assistance to small-scale firms while the price of living problem persists.
Small-scale entrepreneurs are trying their best to ensure that their businesses are operating, and they’re getting help from family and friends, however they require more help.”