As headline UK CPI Inflation is announced at 2.3 per cent, new independent research from Barclays Business reveals small business costs rose 3.2 per cent in the year to February 2017 - meaning SMEs are currently facing higher effective rates of inflation than households.

Ian Rand, CEO for Barclays Business Banking said: “Today’s rise in CPI inflation will be a blow to hard working business owners who are going through an extreme period of uncertainty. Those sectors most exposed to physical input costs such as manufacturing and construction, will continue to be squeezed.

“Inflationary pressures, coupled with the weak pound, will force SMEs to lift their prices in order to protect their profit margins. Rising factory gate prices will sustain ‘pipeline’ pressures on inflation, which is likely to see the headline rate increase further during 2017. With small businesses playing an increasingly important role in strengthening the UK economy – and the rate of inflation expected to remain high for the remainder of 2017 - they must plan ahead to ensure they are well-positioned for further cost increases. Exploring new avenues of growth should be an important consideration for any business struggling with rising costs.”