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Factors influencing rising business prices

by on October 28, 2019 in Business, Latest News, Lead Article, News you can use, Nuggets

Factors influencing rising business prices

Rising business prices can be difficult to predict, particularly as there are a vast number of variables that can lead to the price increase.

However, with a vast amount of political unrest both in the UK and other international locations, the effect it is having on the economy, as well as international business, is larger than ever before.

In this article, we will be looking into some of the factors that have a strong influence on rising business prices and how this is set to change the way that businesses operate.

Supply And Demand

One of the key factors to volatile business prices is supply and demand. Whether this is for resources such as raw materials or fossil fuels or other items such as produce and household goods, this can not only affect the buying prices but also the selling price of a range of specific items. The rule of supply and demand suggests that the higher the prices the less the buyer will want the product, therefore it is important to European suppliers which can, in turn, lead to a rapid increase in the business prices and subsequently the price of goods and services.

Direct Competition

As the economic uncertainty is affected by ongoing political debate, there is more competition than ever before. With the number of competitive industries experiencing less investment due to this uncertainty businesses are experiencing increased prices as a result.

This, therefore, means that prices are rising significantly for goods and services as businesses need to compete with one another during this difficult time. Though this is unavoidable for a number of industries such as car manufacturing, there are a number of closures up and down the country as a result.

As business and international trade continue to be affected by political uncertainty, there is reason to suggest that international trade, as well as business prices, will continue to rise in the near future. With a forecast increase in UK food prices as well as the price of imported goods following the outcome of the Brexit negotiations there is reason to suggest that the prices will increase across the board. But how will this affect the business sector?

As the prices increase, there could be a reluctance to spend leading to a fall in economic stability. Though this is a potential outcome from the Brexit talks, no one knows to what extent this will affect the British economy and how we will recover should it be worse than anticipated.

As the business prices begin to rise due to a number of variables, only time will tell how this will affect the British economy as well as the process of international trading particularly when the UK has left the European Union. Whether this will be a stark increase in prices across the board or just in particular industries you just have to wait and see.

Cryptocurrency Self-Regulation            

Since the implementation of Bitcoin in 2009, the self-regulation of blockchain technology and the implementation of cryptocurrency has not only appeal to individuals looking to take back control of their finances but also businesses looking for a new way to trade.

Though bitcoin and other cryptocurrency have received a mixed reception over the years, with many fluctuations in prices, as well as bitcoin depositing controversies, it has continued to revolutionise the business sector. Due to the decentralised nature of this finance option small businesses are able to make payments quickly with a high level of security in the blockchain system and its processes.

This has therefore caused a rise in business prices as businesses are having to compete with modern-day startups. Though may think that this is a benefit to the business sector, there is a large proportion of business owners that see this competition as a potential threat to traditional business practices as the digital currency becomes much more popular.

Political Uncertainty

Though the business sector can see fluctuations throughout the course of the year, political uncertainty partnered with economic uncertainty can lead to rising business prices.

This is evident not only in the US with the USA and China trade deal, but also here in the United Kingdom with the upcoming Brexit deadline. This is evident in the recent business figures with 35% of companies going bust in the last three months, putting this at the highest level since 2013.

This is as a direct result of the upcoming Brexit deadline as uncertainty begins to affect UK based businesses as the government continues the ongoing negotiations to a peaceful Brexit deal.

With extension after extension to the process, this state of political uncertainty is set to harm businesses further and could see the pound begin to drop in value as we draw closer.

In addition to this, other sticking points such as the Irish backstop as well as the possibility of a no-deal Brexit coming into fruition are causing a number of businesses as well as individuals to consider contract renewals with European suppliers which can, in turn, lead to a rapid increase in the business prices and subsequently the price of goods and services.

Direct Competition

As the economic uncertainty is affected by ongoing political debate, there is more competition than ever before. With the number of competitive industries experiencing less investment due to this uncertainty businesses are experiencing increased prices as a result.

This, therefore, means that prices are rising significantly for goods and services as businesses need to compete with one another during this difficult time. Though this is unavoidable for a number of industries such as car manufacturing, there are a number of closures up and down the country as a result.

As business and international trade continue to be affected by political uncertainty, there is reason to suggest that international trade, as well as business prices, will continue to rise in the near future.

With a forecast increase in UK food prices as well as the price of imported goods following the outcome of the Brexit negotiations there is reason to suggest that the prices will increase across the board. But how will this affect the business sector?

As the prices increase, there could be a reluctance to spend leading to a fall in economic stability. Though this is a potential outcome from the Brexit talks, no one knows to what extent this will affect the British economy and how we will recover should it be worse than anticipated.

As the business prices begin to rise due to a number of variables, only time will tell how this will affect the British economy as well as the process of international trading particularly when the UK has left the European Union.

Whether this will be a stark increase in prices across the board or just in particular industries you just have to wait and see.

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