A rise in energy bills has meant that inflation levels in the UK have also begun to rise.
Higher inflation levels push up the cost of living which can have a negative impact on businesses as people have less disposable income to spend on businesses.
In October, the inflation rate rose from 1.7% to 2.3%, the highest rate we have seen in six months. Although this figure is much lower than the 11% inflation figure we saw in 2022, it will still impact businesses' budgets.
Inflation and higher energy bills
Inflation rates and higher energy bills can create issues when keeping your company operational.
The main drive for the rise in inflation was energy levels—particularly gas prices.
Energy prices in the UK are still significantly above pre-energy crisis levels and are likely to remain above throughout 2025.
Ofgem, the UK energy regulator, has set a new price cap for domestic customers in January. This indicates a jump in wholesale prices that will also affect business customers.
What impact will this have on your business?
When prices are rising businesses in all areas, it can cause many issues when it comes to financial planning and budgeting. This can have many impacts on businesses.
Rising Costs
One of the biggest impacts of inflation and rising energy prices on businesses is the need to increase prices to ensure a profit. If the cost of running the business and stock becomes expensive, businesses are forced to increase prices, which can damage the company’s relationship with regular customers.
Supply Chain Disruptions
Inflation can also cause issues within the supply chain. If a business's suppliers increase prices too much, they might have to find another supplier or a cheaper alternative. Again, this can damage a businesses reputation.
Businesses are concerned about price shocks
Business owners have already shared their concerns about what a rise in inflation is going to mean for them. One restaurant owner says that she is limited on what she can offer customers to ensure she does not have to put prices up.
Prices are especially an issue in the hospitality sector. This is because as inflation rises, they have energy costs and food costs to worry about to keep their businesses running.
How can your business combat higher prices?
Operational Adjustments
One way your business can gain financial control is to adjust your operations to avoid harsh price rises. One way you could do this is to invest in energy efficient systems that could reduce your energy spending. This will give your business more money to put back into your bottom line.
Cost Management
Another way your company can manage higher energy prices is to work with an energy broker who could help you reduce your annual bills. At Resolve Energy our team of dedicated energy brokers do this by negotiating with energy suppliers to find you the cheapest energy contract.
Diversification
Finally, one more way your business can gain financial control is to explore new markets or products that your business could offer that would increase profits and therefore your bottom line.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
