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Costs stacking up for small businesses despite increasing orders
Reported on Mon, 07 Aug 2006
Small to medium-sized businesses in the UK are experiencing a surge in sales and orders, but rising inflation and raw material costs could see them turning to business loans for financial support.
Despite increased orders, three per cent more SMEs reduced staff to cut back costs during the second quarter of the year, according to a report from the Small Business Research Trust (SBRT).
Brian Wolfe, chairman of the SBRT, said: "While our survey indicates that small businesses have been holding up over the past six months, this feel good factor may rapidly change against a background of increasing energy costs together with inflationary pressures that have now forced the Bank of England to increase interest rates."
Self-employed tradesmen could be hit the worse by rising inflation pressures as raw material prices continue to rise.
Petrol prices could also rise, as the wholesale price of crude oil reached $77 (£40) today, meaning further financial uncertainty for SMEs.
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