Small businesses facing "unstable situation"

Rising fuel prices are creating a "toxic combination of problems" for businesses in the UK, an expert has said.

The Forum of Private Business (FPB) commented the unpredictable state of world oil prices plus high fuel duty is causing both small companies and their customers to suffer.

Phil McCabe of the FPB said small businesses depending heavily on day-to-day transport may "see little point in planning for the future, as they are unable to predict when oil prices will stabilise."

"FPB members … are struggling to pay for the inexorable rise in fuel prices. Passing the cost onto their customers is, perhaps, an unfortunate necessity," he said.

This may make small companies less competitive, he added. It may also cause debt problems for smaller businesses.

Figures released by the Federation of Small Businesses this month show 80 per cent of small business owners feel they will be unable to expand in the next year due to fuel costs and 40 per cent may have to cut staff numbers.