Export costs hit three-year high as Iran conflict weighs on British businesses
According to today’s ONS data on business insights and impact on the UK economy, British businesses are being hit hard by the latest resurgence in the Iran war tensions.
In July 2026, over a quarter (29%) of businesses with 10 or more employees reported that they were concerned about international conflict affecting supply chains over the next year, while a further fifth (20%) were worried about the impact of shipping disruption; these proportions were broadly stable from June 2026, but up 19 and 12 percentage points, respectively, from December 2025, reflecting the significantly more hostile geopolitical landscape.
More than half (52%) of UK businesses expected the cost of sourcing materials to be impacted, while a further 47% expected transportation costs to be affected – broadly stable from June but a 14-percentage point rise from December 2025.
Almost three in five (57%) businesses expressed some degree of concern regarding energy prices in late July 2026.
While 7 in 10 (70%) firms with more than 10 employees expressed some degree of concern regarding fuel prices in late July 2026, a 3-percentage point rise from early July.
At the end of June 2026, just under a quarter (23%) of trading businesses with 10 or more employees reported that they had exported goods, services, or both in the last 12 months – of these businesses, four in 10 (39%) reported their exporting costs increased in June 2026 compared with June 2025, a 9-percentage point increase compared with December 2025 and the highest proportion reported since June 2023 (43%).
Commenting, Samuel Edwards, head of client portfolio management at global financial services firm Ebury, said: “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.”