Small firms have experienced the sharpest quarterly hike in costs for five years, according to a new report.
The Business Inflation Guide, which is produced by Warwick Business School and insurance company More Th>n Business, recorded an inflation rate of 2.7 per cent in firms’ costs between January and March this year, the highest since 2005.
Vehicle maintenance and tax saw the largest increase (7 per cent), with fuel costs rising by 6 per cent and office equipment by almost 6 per cent.
Manufacturing firms suffered the main impact of the rises as they saw their costs climb by 3 per cent in the first quarter of the year.
Stephen Roper, Stephen Roper, professor of enterprise at the Centre for Small and Medium Sized Enterprises at Warwick Business School, said: “Economic recovery looks set to take longer than expected and small businesses are still facing a challenge in getting financial support from banks.
“Subsequently, they are being forced to push up prices for their customers in order to absorb rising costs.”