Small firms are pleading for the Government to step in over sky-high energy bills, which have soared by as much as 400 per cent in some cases, leaving many fearing they could be put out of business by the end of the year.
More than half of small companies — 54 per cent — fear their running costs could force them to close, according to a report by SME Insights and insurer Simply Business.
Businesses are not protected by energy watchdog Ofgem’s price cap and they face paying 20 per cent VAT on their energy bills, whereas most ordinary households pay five per cent.
The crippling energy price increases are forcing many of Britain’s remaining pubs, restaurants and high street businesses – which have scraped through lockdown – to reduce their hours, and in some cases, close permanently.
It comes as inflation hits double figures for the first time in 40 years, the highest it’s been since 1982, at 10.1 per cent.
Surging energy prices will be the key factor in driving inflation to 18.6 per cent – the highest level for nearly half a century – in January, according to financial services firm Citi.
It says inflation of the Consumer Price Index (CPI) inflation – which indicates the increase in the amount people pay for goods and services – will soar past the 13 per cent which the Bank of England previously said would be the peak in October, instead hitting the highest level since 1975 in the new year.
Now, an estimated 45 million people will struggle to pay energy bills this winter with predicted rises in price cap.
The new study, by the University of York, shows that 18 million families will be left trying to make ends meet after further predicted rises in the energy price cap in October and January.
The energy price cap is forecast to rise above £3,600 for the average household from the start of October.
It could then top £5,000 in January, and rise above £6,000 in April, according to the latest forecasts.
Even with the support that has already been announced, the four million households in the UK with pre-payment meters will be spending around 44 per cent of their monthly disposable income on bills during the depths of winter.
Thousands of people could see their power cut off if they are unable to pay for it up front, while millions of direct debit customers could fall behind on their bills and shred their credit ratings.
The number of families falling behind on at least one utility bill increased from 9 per cent in October 2021 to 14 per cent in June.
Source: Daily Mail