UK businesses will “tip into distress” unless the government launches an emergency support package to deal with the cost of living crisis, the country’s biggest business group has warned.
Some 69 per cent of firms expect to be hit by higher energy costs over the next three months, eating into their capacity to survive, according to the Confederation of British Industry (CBI).
Businesses and consumers’ finances are being squeezed by historic inflation that is threatening to tip the UK into a long recession.
The energy watchdog is expected to announce a 80 per cent rise in the bill cap this Friday, possibly plunging millions of Brits into fuel poverty.
While the cap on bills protects consumers from high energy prices, businesses do not receive the same benefit.
As a result, “many viable businesses are under pressure and could easily tip into distress without action,” Matthew Fell, chief policy director at the CBI, said.
The government has said it will wait until the Tory leadership contest ends on 5 September before launching further cost of living support measures.
Rivals Rishi Sunak and Liz Truss have primarily focused on outlining what support they will offer households during the leadership contest.
Truss favours tax cuts, while Sunak has said he will ramp up cash payments to the poorest Brits.
Inflation has climbed to 10.1 per cent, a 40-year high, propelled by soaring energy prices.