4 | Q3 2022 • Half (51%) of UK SMEs would prefer two more lockdowns than any more inflationary rises • Three quarters (76%) agree that the economic landscape is killing entrepreneurialism • Only one in ten (11%) is prepared for inflation-related challenges if costs continue to rise • SMEs urgently demand clarity over Government intervention New research from SME funder, Bibby Financial Services (BFS), sheds further light onto the cost of doing business emergency unfolding for the UK’s small and medium sized businesses as they fight for survival. Findings from the latest SME Confidence Tracker survey , which explores the views of 500 SME owners and decision makers, shows many are at breaking point, with almost four in five (79%) stating the current economic landscape is worse than the pandemic and just one in ten (11%) fully prepared to deal with further cost rises expected. Derek Ryan, UK Managing Director of Bibby Financial Services, said: “Two years ago, we thought the Covid-19 pandemic and successive lockdowns were the greatest issue to hit businesses in a generation. However, SMEs are now telling us that the current economic climate is unsustainable. In the face of a near certain economic recession and spiralling costs, it’s life or death for many of the UK’s SMEs.” These findings come as record inflation and soaring energy bills – set to rise by 80% in October – pile pressure on the purse strings of businesses, and SMEs demand action from the UK’s new Prime Minister, Liz Truss. The survey findings are stark; the current economic environment is significantly worse than the pandemic, to the extent that half of SMEs (51%) would prefer two more lockdowns to a further inflationary rise, and the majority (76%) are concerned that the economic climate is killing entrepreneurialism. In addition, as inflation continues to squeeze margins, 41% say they are cutting back on investment due to the cost of doing business, 43% of SMEs are cutting costs overall, and 47% are passing higher costs to customers. In what could be a significant blow to current levels of employment, 12% of SMEs are making redundancies as part of their cost-cutting measures, which could equate to more than 650,000 jobs lost. With inflation expected to climb, worryingly, only about one in ten (11%) businesses surveyed is fully prepared for inflationrelated challenges. And SMEs predict further cost hikes could result in even higher costs for customers (63%), hiring, salary and promotion freezes (26%), and cuts to investment plans (23%). Nearly a fifth (17%) of businesses will consider turning to short term lending. Current economic climate is worse than during the pandemic, say 79% of SMEs
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