UK exporter costs rise as conflict strains supply chains

Almost four in 10 UK exporters reported higher costs in June as concern over international conflict, shipping disruption and energy prices placed renewed pressure on business margins and working capital.

The Office for National Statistics said 39% of exporting businesses with at least 10 employees experienced increased exporting costs compared with June 2025. The proportion was nine percentage points higher than in December and the largest recorded since June 2023, when it reached 43%.

The finding came from businesses that had exported goods, services or both during the preceding 12 months. Exporters accounted for 23% of trading businesses with at least 10 employees.

Broader supply-chain concerns have also risen sharply since the end of last year. In late July, 29% of businesses with at least 10 employees said they were concerned that international conflict would affect supply chains during the next 12 months.

A further 20% identified shipping disruption as a concern. Although both figures were broadly unchanged from June, they were respectively 19 and 12 percentage points above their December levels.

Among businesses reporting supply-chain concerns, 52% expected the cost of sourcing materials to be affected and 47% anticipated an impact on transport costs. The transport figure was 14 percentage points higher than in December.

Energy and fuel remained significant sources of uncertainty. Seventy per cent of businesses with at least 10 employees expressed some concern about energy prices, while the same proportion was concerned about fuel costs. Concern over fuel was three percentage points higher than in early July.

Ebury said the figures showed how disruption associated with the conflict involving Iran was feeding into UK trading conditions. The ONS data itself refers more broadly to international conflict and does not attribute the results exclusively to Iran.

Samuel Edwards, Ebury’s head of client portfolio management, said access to flexible finance and effective foreign-exchange risk management were becoming “business essentials rather than optional safeguards”.

Higher material, transport and fuel costs can increase the cash required to fulfil an export order before payment is received. Longer or less predictable shipping schedules can also extend inventory and receivables cycles, intensifying demand for trade finance and short-term liquidity.

The ONS classified the figures as official statistics in development and advised caution when interpreting them. Its latest survey received 10,034 responses from a sample of 38,618 businesses.

Source: ebury.com