Global Trade Alert: Iran Crisis Driving Cost Pressures for UK Firms

According to the British Chambers of Commerce report on rising costs from the Iran crisis, 80% of UK firms report either an existing or expected impact from the conflict, signalling a significant and widespread disruption to global trade dynamics.

What this means for international traders

The findings reinforce what many exporters and importers are already experiencing:

·         Rising energy costs: Around 75% of businesses expect energy bills to increase over the next 12 months, with a large proportion anticipating rises of more than 20%.

·         Shipping disruption and unpredictability: Firms report higher freight costs, longer transit times, and reduced route availability, particularly for trade with Asia.

·         Increased input and raw material costs: Supply chains remain volatile, with suppliers passing on price increases, sometimes at short notice.

For Suffolk businesses reliant on global supply chains especially in manufacturing, food production, and advanced engineering, these pressures are likely to translate into tighter margins and more complex planning.

Manufacturing and global supply chains under strain

The manufacturing sector is currently the hardest hit, with 68% of firms already experiencing disruption, and a further 23% expecting impacts in the near term. Many businesses report unpredictable shipping schedules, increased freight surcharges and delays in sourcing critical components. These challenges underline the exposure of UK industry to global geopolitical shocks, even when there is no direct trade with the affected region.

Energy volatility: a key risk for business resilience

Energy is emerging as the most significant concern. Over a third of firms (36%) expect difficulties paying energy bills in the coming year, reflecting the absence of a price cap for businesses and ongoing sensitivity to global energy markets.

The crisis has also raised concerns about disruption to key global shipping routes, including the Strait of Hormuz one of the world’s most critical energy and trade chokepoints adding further uncertainty to supply chains and pricing structures.

Looking ahead

The British Chambers of Commerce warns that even if the conflict de-escalates, the economic impact is likely to be felt for months to come, with no immediate “quick fix” for businesses navigating these cost pressures.

Read the full BCC press release:

British Chambers of Commerce report on rising costs from the Iran crisis