Dun & Bradstreet has released its Business Resiliency report, displaying statistics which would seem to line up with recent fluctuations and changes in interest rates. According to the report, rising costs are “already weakening customer demand”, and surveyed business leaders cite “weakening customer demand (25%) and increased taxation (24%)” as some of the biggest challenges for this year”.
In fact, Dun & Bradstreet report that overall increases to the cost of doing business is expected to have an acute impact on more than a third (37%) of the businesses surveyed in 2023.
Following the Bank of England’s decision to hike interest rates, Dun & Bradstreet’s associate director of economic research, Tommaso Aquilante, commented: “Stubborn headline and core inflation in February lead the Bank of England to press ahead with rate hikes. There are however good reasons to think that inflation will drop sharply in late 2023 to reach a new and happier medium. Booming energy prices and supply chain bottlenecks that contributed to the surge in inflation in 2022 are now gradually subsiding, and the steep price increases experienced last year won’t factor into this year’s inflation calculations.
“It’s worth keeping in mind that even if inflation drops to 2.9%, in line with OBR’s prediction, inflation would still be an eye watering 6% or higher year on year. This in turn will continue to have a negative impact on households’ finances and UK businesses’ purchasing power, and put pressure on businesses costs of the course of the year. In fact, more than a third (37%) of businesses we surveyed asserted that the overall cost of doing business this year would be a huge challenge.
“Businesses are going to have to focus on how they can remain resilient, productive and competitive as this turbulent period continues. Business liquidations are on the rise, costs remain high and financial conditions continue to tighten. This is where quality data insights can be useful to assess both risk and growth opportunities. Doing so can provide a competitive advantage and bolster business resilience.”
For more on Dun & Bradstreet’s report on the state of the British economy.