Inflationary pressure poses a huge risk to Scottish businesses in the coming months, with a significant number unprepared for the highest level of inflation in 30 years.
Accountancy and business advisory firm BDO estimates that 73% of businesses have only accounted for a 3% to 5% level of inflation this year – already well below the current 6.2% rate, which is the highest it’s been since the 1990s.
The Office of Budget Responsibility (OBR) has suggested that the fallout from the war in Ukraine could push inflation to a 40-year high of 8.7% in the final three months of 2022, with The Bank of England also warning that inflation could hit double digits.
A BDO survey has revealed that nearly half of Scottish companies are planning to seek additional finance in order to counteract rising inflation.
Kevin Lamb, managing director at BDO in Scotland, commented: “It’s very clear that rising inflation is having a profound effect on businesses in Scotland.
“Companies have done the right thing and planned for higher levels of inflation this year, but forecasts are well below the current and expected rate of inflation.
