More than three quarters of UK businesses are already feeling the impact of the Middle East conflict, as rising energy costs and supply chain disruption begin to feed through into operations, yet confidence at the firm level remains notably resilient.
New research from Barclays, based on a survey of more than 500 business leaders, shows that 66 per cent of companies are experiencing pressure from higher fuel and energy prices, while half report moderate to significant disruption to supply chains.
The findings highlight the speed at which geopolitical instability is affecting day-to-day business activity, with shipping and logistics costs also rising for 43 per cent of firms, adding further strain to margins.
Companies are already responding by adjusting operations and cutting costs. Around 37 per cent have taken steps to reduce energy usage or improve efficiency across their supply chains, while nearly a third have increased prices to offset rising expenses.
Other measures include reducing discretionary spending and tightening overall cost control, with many firms expecting to intensify these actions over the coming months. More than a third are planning further price increases, signalling that cost pressures are likely to continue feeding through to consumers.
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