Rising energy prices a bane for UK businesses: ONS study

LONDON - One in six businesses in the United Kingdom (UK) expect their overall performance to drop in 2023 as a result of the spiking energy prices, the Office for National Statistics (ONS) said in a study on Monday.

Food and drink service businesses are the most affected, with 45 percent of them expecting their performance to drop, followed by those active in the accommodation sector, at 30 percent.

The ONS said more than a fifth of the country's businesses said energy prices were their main concern for November 2022.

Food and drink service businesses are more likely than any other industry to cut their weekly trade by at least two in November 2022 to reduce their energy bills, the ONS said.

They are also by far the most likely to reduce trading hours, even if they are still operating for the same number of days, it said.

About 28 percent of UK businesses said they expected their prices to increase in November. The respective figure among the country's food and drink service businesses was 41 percent.

Around 76 percent of food and drink service firms and 59 percent in accommodation said energy costs were making them consider price increases, compared to 34 percent across all industries.

The study also reveals the likely impact of energy prices on trading performance. When asked about turnover expectations for November, 21 percent of all businesses and 70 percent of accommodation businesses predicted lower turnover.

The broader hospitality industry, which employs around one in 14 workers in the UK, has been particularly affected by rising energy prices, the ONS said.

Manufacturers are also under pressure, with more than half of them saying that their production and/or supply had been affected by the rising energy prices.

Around 37 percent of manufacturing firms said they expected their prices to rise in November. More than a third of businesses whose production was affected by energy price rises expected their turnover to drop in the month.