Businesses Brace for Rising Costs

SMEs Brace for the Cost Avalanche

New findings from iwoca, one of Europe’s most prolific SME lenders, reveal that small and medium‑sized businesses across the UK are gearing up for a roller‑coaster of increased costs in 2025.

Running Costs – The Highest Nail in the Wall

42% of business owners name rising operational expenses as the top concern.
From fresh deliveries to higher energy bills, it’s the biggest pressure point for many.

The Tax Spotlight

Second only to cost hikes, 40% of owners worry about potential tax hikes under the current government.
“It’s like watching a bad TED Talk on economics,” says one owner, stressing uncertainty about the fiscal front.

Trust, or the Lack Thereof, in the Government

Only 45% hold a positive view of how the government has performed since taking office last summer.
When asked if the administration is keeping up with their expectations, 41% say it’s falling short.

Political Voice – Where’s the Representation?

70% of business owners feel politicians don’t take SME needs seriously.
An almost equal proportion, 69%, believe the government is on the wrong track for supporting small and medium‑size companies this year.

In short, the SME community is sprinting toward higher costs and uncertain economic skies, with a side of skepticism toward political support. The next fiscal year promises to be a day‑to‑day grind for many thriving ventures.

Lagging on the global stage?

Small‑Business Sentiment in the UK

It’s a bit of a mixed bag for owners of SMEs. Only 51 % of them see a bright economic future for the country, so the rest are feeling more like a rainy Sunday than a sunny outlook.

Why the Numbers Matter

Economic optimism – just over half (51 %) are on the hopeful side, meaning a sizable minority are in the doubts‑god‑kill‑so‑we‑get‑a‑hard‑answer corner.
Global ranking worries – an even larger chunk (66 %) thinks the UK is slipping behind the world’s other big moneymakers. That’s a jump of two points from last year, so it’s not just a passing phase.

What It Means for SMEs

When you’re juggling a handful of employees and a handful of customers, you can’t ignore a nation that feels “behind the curve.” These numbers suggest that many small business heads are actively brewing doubts about how the UK will stack up against China, the US, or even newer tech hubs.

Heart‑felt Takeaway

The bottom line? If you’re a small‑business owner, you’re probably wrestling with a mix of optimism, frustration, and that nagging thought that maybe, just maybe, there’s a better future outside the UK’s borders. It’s a reality check that many are still scaling in a world that feels a bit slippery.

Confidence confined to individual outlooks

UK SMEs Stay Confident Despite Rollercoaster Economy

Even with the UK economy feeling a bit uneasy, the small and medium‑sized firms that keep the country buzzing are surprisingly optimistic about 2025.

Turnover Growth on the Horizon

71% of SME leaders say their businesses will grow this year.
Only 8% expect a decline.

Headcount Plans in Line with Revenue Hopes

More than half (55%) plan to hire new staff.
They’re betting the market will open up when they expand.

Personal Fortune Looks Bright

Even though the UK’s economic resilience and political scene are a bit of a mixed bag, a little over half 57% of business owners feel better off by year‑end.

Words from the Big Leaders

Christoph Rieche – CEO, iwoca

“The government’s chief mission should be to kickstart economic growth. We’ve got 5.6 million SMEs that are the backbone—if they lose confidence, we’re all in trouble.”

He calls for a tax system that encourages risky investments.
Wants steady inflation so businesses can hit their goals.
Describes the recent years as a rollercoaster—but hope is alive again.

Oli Perron – Founder, Lunch’d

“Inflation and taxes are out of our hands, so we raise prices and chase premium clients who can cope. Big inflation would cut our margins and slow growth, and rising energy costs throw another curveball.”

He’s optimistic about revenue and hiring.
Believes in economies of scale and seasonal produce to keep costs low.
Highlights that real growth comes from real innovation, not just the macro‑trend.