Concern about energy costs among UK businesses has reached its highest recorded level since the Office for National Statistics began asking its current survey question in March 2026. According to figures published on 8 October, 72% of businesses expressed some degree of concern about energy prices, with the proportion rising to 91% among businesses operating in accommodation and food services.
The figures do not necessarily mean that every business has experienced an increase in its energy bills, but they illustrate the continuing uncertainty facing business owners who must manage operating costs while remaining competitive. For businesses where heating, refrigeration, manufacturing equipment or other energy-intensive activities represent a substantial proportion of expenditure, even relatively modest price increases can have a significant effect on profitability.
Start by understanding consumption
Although businesses cannot control wholesale energy prices, they can review how efficiently they use electricity and gas. A useful starting point is to examine consumption over the preceding 12 months, comparing both the quantities used and the amounts charged. This distinction matters because an increase in the total bill may reflect higher consumption, a change in the unit rate or additional standing charges.
Businesses should also establish when their current energy contracts expire and whether alternative arrangements might provide greater certainty. A fixed-price agreement may offer protection against future increases, although it can also prevent the business benefiting if market prices fall. The most suitable arrangement will depend on consumption patterns, financial circumstances and the degree of uncertainty the business is prepared to accept.
Consider the wider financial implications
Energy costs should also be considered when reviewing selling prices and profitability, particularly where contracts with customers have been agreed for extended periods. A business operating on relatively narrow margins may find that an increase in overheads substantially reduces its profits unless it can improve efficiency or recover some of the additional cost through pricing.
Cashflow forecasts provide another opportunity to assess the potential consequences, allowing businesses to consider alternative cost assumptions and identify periods when additional working capital might be required.
There may also be opportunities to reduce consumption through improved insulation, more efficient equipment or changes to operating procedures, although any investment should be assessed against its likely financial return.
Rather than waiting for the next energy bill to arrive, businesses would be well advised to review their current arrangements and establish how sensitive their profitability is to further changes in energy costs. Their accountant can assist by incorporating alternative cost assumptions into forecasts and identifying where improvements would have the greatest financial benefit.