A new report from Novuna Business Finance has revealed that 90 per cent of small businesses say that the rising cost of living represents a threat to their growth plans for the year.

The latest findings from the Business Barometer study, which has been tracking business owner views on the cost-of-living crisis since it began in 2022, suggest a three-year peak in how many firms say that aspects of rising living costs are threatening their future growth plans.

In results for Q2 2026, 42 per cent reported concerns about clients or customers potentially spending less money with them. These concerns were particularly acute in the retail (72 per cent) and hospitality (60 per cent) sectors.

Concerns were also expressed over how to manage rising costs, with 33 per cent of small businesses saying they had been forced to absorb rising supplier costs, while 35 per cent said they were unable to pass price increases on to customers.

32 per cent of owners, meanwhile, voiced concerns over the impact of soaring energy prices and 29 per cent cited worries over rising transportation and logistics costs. 25 per cent, meanwhile, were worried about business rates and rising rents.

More than one in five businesses (21 per cent) said they were concerned they would not be able to pay staff more money and help salaries remain in line with rising living costs, up from 16 per cent two years ago.

Businesses were also polled on how they planned to navigate these challenges. Half (50 per cent) said they needed to secure funding or finance in order to invest in growth plans, a need most commonly cited by small businesses in the manufacturing (62 per cent), hospitality (62 per cent) and retail (59 per cent) sectors.

Jo Morris, Head of Insight at Novuna Business Finance, commented “As part of our long-standing tracking of small business growth outlook, we have monitored the business impact of the cost-of-living crisis since it began in 2022. The results show that cost-of-living pressures have been a consistent worry for small business owners for many years.”

“If anything, concerns have risen this year. Our data shows that the rise in employers’ National Insurance has triggered fears of further tax rises. It also highlights the impact of the oil crisis on small business running costs. In addition, concerns over falling customer volume and spending present further challenges that small businesses have to deal with over the summer months.”