Half of small and medium-sized enterprises in the UK plan to raise their prices this year, with supply chain disruption being the key driver.
Moreover, one in three owner-managed businesses plan to make redundancies now the safety net of furlough has been removed, according to new research shared with City A.M. this morning.
Those businesses planning to make redundancies are on average considering shedding 45% of their workforces over the next six months, accountancy network Moore UK found.
Owner-managed businesses in London are more likely than those in any other part of the UK to be planning redundancies, with 42 per cent considering laying off staff.
Moore said that this likely reflects the effects of the pandemic on the finances of restaurants, hotels and pubs, which make up a significant part of London’s economy.
Maureen Penfold, Chair of Moore UK, says that while a wave of redundancies did not materialise at the end of furlough on September 30, many businesses are now waiting to see whether layoffs become necessary over the coming months.
“The UK is far from out of the woods when it comes to redundancies.”Maureen Penfold, Chair of Moore UK
“It’s surprising to see so many businesses are considering reducing staffing numbers so substantially. Policymakers should be careful not to assume that the economy is back in rude health – especially taking into account how the new restrictions just implemented may further impact businesses.”
“No business wants to lay off staff if it can be avoided and it seems like many are still waiting to see if they need to press that button. Their cash flow might allow them to keep their full workforces employed for now but they have plans in place to quickly make redundancies if they need to,” Penfold concluded.