Half of UK SMEs have been forced to raise their prices to cope with escalating energy bills. 

That’s according to a new survey conducted by Paragon Bank, which reveals that 90% of SMEs have experienced an increase in their energy costs in 2023, with an average hike of 26.6%.

The survey interviewed over 500 businesses and it found that 41% of companies reported a surge in energy bills ranging from 20% to 50%, while 10% faced even higher increases.

These rising energy costs are reflective of the wider inflationary pressures affecting UK SMEs, with businesses also grappling with significant cost increases in raw materials (22.6%), new equipment and machinery (21.4%) and employee salaries (17.7%).

To mitigate the impact of higher energy expenses, businesses have implemented various measures.

The most common approach, undertaken by 54% of SMEs, has been to raise their own prices.

An additional 26% are considering taking this step.

Additionally, 38% of companies have invested in greener equipment to improve energy efficiency, while 36% have made changes to their premises, such as installing solar panels.