Cost pressures build for UK exporters amid Red Sea crisis

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Cost pressures build for UK exporters amid Red Sea crisis

The British Chamber of Commerce says more than half of UK exporters have seen shipping operations adversely affected by the Red Sea crisis.

In a study released Monday, the chamber’s Insights Unit reported massive disruptions to British businesses, manufacturers and consumers as result of the ongoing Red Sea standoff that began in October 2023.

Two-fifths of the 1,087 businesses surveyed reported impacts like increased costs and delays. The most affected were exporters, with 55% reporting problems, followed by manufacturers at 53%.

Exporters indicated price increases of up to 300% and delivery delays of three to four weeks. These issues contributed to cashflow problems and shortages.

“Recent ONS data also indicates the impact has yet to filter through to the UK economy, with inflation holding steady in January,” said William Bain, head of trade policy for the chamber.

“But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build.”

Bain said new customs checks and procedures for imports have also contributed to cost increases and delays.

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