Business Blog Posts

3 December 2010 Last updated at 07:21 ET

The continuing snow and icy weather conditions are jeopardising the future of hundreds of small businesses across the UK, business groups have warned.

The Centre for Economics and Business Research (CEBR) told the BBC as many as 800-900 small businesses were under threat as a result of the cold snap.

Businesses where cashflow is vital, such as bars and restaurants, are really suffering, it said.

The Federation of Small Businesses said members were "particularly hard-hit".

Estimates vary widely about the full extent of the overall cost to the UK economy of the cold weather.

Douglas McWilliams, chief executive of the CEBR, told BBC Radio 4's Today programme that about one-fifth of the economy had been affected, costing about �1bn every day.

However, Chris Gorman at the Forum for Private Business put the figure at nearer �250m, with 10% of the workforce being affected.

'On the brink'

Some industries will suffer a temporary hit, analysts say. For example, construction projects will be put on hold until the weather improves. This is precisely what happened during the cold spell in January this year.

But other sectors, particularly retail and leisure, could lose out on business entirely, with potentially severe consequences for some small businesses.

"Quite a lot of small businesses are quite close to the brink now," said Mr McWilliams.

"I think at least a few hundred, maybe as many as 800 or 900, could go bankrupt that otherwise wouldn't have because this is the straw that breaks the camel's back."

He said businesses that rely on cash were particularly vulnerable.

"If a restaurant loses a night's business, it's not going to get it back," he said.

Well prepared

The Federation of Small Business said it was "disappointed that we still haven't learnt the lessons from previous bad weather and that the country has yet again ground to a halt".

However, it said small businesses were better prepared for this cold snap than those in previous years.

It said that four in 10 of its members had made arrangements in advance for staff to work from home, three in 10 were offering flexible working hours and almost one in five had bought their own supply of grit to clear shopfronts and the roads outside their premises.

3 December 2010 Last updated at 22:21 ET

A group protecting consumers' rights has written to watchdog Ofgem to complain about 'extremely concerning behaviour' by energy firms.

Consumer Focus said the big six firms offer 'confusing tariff behaviour and unclear price rises'.

Its move follows a slew of electricity and gas price rises in the past month.

It comes a week after Ofgem launched an investigation into the price rises by some firms, saying they have widened the suppliers' profit margins.

'Designed to confuse'

Three of the big six energy companies have increased their prices this year - blaming the rising wholesale prices that they have to pay.

But Consumer Focus says that, on top of price rises, the gas companies are not being fair with consumers in other ways.

The consumer watchdog has written to Ofgem saying that the multiple energy tariffs are "overly complex", offer "dubious discounts" and are "designed to confuse".

It also pointed out some specific issues:

• Scottish Power halved the discount for prompt payers and increased prices within weeks of the original offer being made
• First Utility was accused of 'extremely concerning behaviour' in how it increased its prices for new customers within weeks of them signing a contract

And the potential to confuse was highlighted - the Big Six offer 93 different tariffs to choose from, an average of over 15 different products per company.

"In our competitive energy market customers can choose from a wide range of different energy tariffs to suit their needs," said industry body Energy UK in response.

"Energy companies are constantly innovating to offer their customers a range of deals and a variety of payment methods."

Last week Ofgem announced a detailed review of the entire sector fearing that it was making excessive profits.

And on Tuesday the bosses of Britain's largest energy companies will appear before MPs to answer questions about how tariffs are set.

3 December 2010 Last updated at 18:26 ET

The price of oil on both sides of the Atlantic has hit its highest level since the financial crisis.

In Europe, Brent crude futures rose to $91.58 per barrel, while in the US, West Texas Intermediate hit $89.35 - the highest levels since October 2008.

Despite the market rally, prices still remain 40% below their pre-crisis peak.

Among the factors driving prices higher are rising demand because of the global economic recovery and cold weather in Europe, as well as the weak US dollar.

Meanwhile, temperatures are also expected to fall in the eastern United States, according to the US National Weather Service.

Weak dollar

The rising price was only briefly dented in early trading, after the release of weaker than expected US jobs data for November.

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However, the data - and comments from US Federal Reserve chairman Ben Bernanke - raised expectations of further monetary easing by the US central bank.

Any increase in the Fed's "quantitative easing" - printing new dollars to buy up US government debt - is likely to depress the dollar's value further, raising the price of oil in dollars.

Many banks have recently raised their forecasts for the oil price over the next two years, with Goldman Sachs now saying it will rise to $100 in 2011.

The current oil price is already significantly above the levels experienced prior to 2007.

During 2007-08, oil and most other commodities were subject to a speculative bubble that pushed the price of Brent crude up to $147.50 at its peak in July 2008.

This time the rising oil price is also being shadowed by price rises in only a handful of other commodities - notably grain and cotton.