Export costs hit three-year high as Iran conflict weighs on British businesses, ONS data reveals

These latest figures underline just how quickly the Iran conflict is feeding through into the UK economy. British businesses are not only concerned about future disruption but many are already seeing higher exporting, transport and sourcing costs, with the sharp deterioration since December showing how rapidly trading conditions have become more challenging.

British firms are having to contend with a combination of supply chain disruption, volatile energy and fuel prices and rising shipping costs, all of which threaten to squeeze margins, delay investment and dampen confidence. The growing proportion of British exporters reporting higher costs is particularly concerning, as it risks eroding the competitiveness of UK businesses at a time when economic growth remains fragile.

The Burnham government must ensure British trading businesses have the certainty and support they need to navigate this increasingly unpredictable environment. Reducing barriers to trade, providing confidence to invest and helping firms remain globally competitive will be critical if the UK is to weather further geopolitical shocks.

Businesses also cannot afford to be passive. Operational readiness, access to flexible finance and effective FX risk management are becoming business essentials rather than optional safeguards. Those that regularly review their hedging strategies and maintain sufficient liquidity will be far better placed to withstand further disruption and respond quickly as market conditions evolve.