'Big impact': UK economic chaos, pound plunge hit businesses

LONDON (AP) — Like many small business owners in Britain, Harry Niazi hoped for government help to keep his south London fish and chip shop going in the face of rocketing energy bills and soaring inflation.

But an economic stimulus plan announced last week by Prime Minister Liz Truss’ new government brought no relief — far from it.

For Niazi and millions across the United Kingdom, things went from bad to worse after the promise of huge unfunded tax cuts sparked turmoil in financial markets and sent the British pound tumbling to a record low against the U.S. dollar this week.

“Everything’s based on the dollar — diesel for the vessels to catch the fish, trucks to deliver our products. It has a big impact,” Niazi said from his takeout shop, Olley’s Fish Experience.

The pound’s slide is hitting many businesses hard because imported materials and commodities like natural gas that are priced in dollars will be more expensive. Businesses will likely be forced to pass the costs on to consumers, which would further push up inflation — already close to a 40-year high at 9.9%.

That would worsen the squeeze on people facing yet another hike in their household energy bills Saturday, even though Truss' plan capped a more devastating 80% rise as natural gas prices soar.

“I’m terrified of putting my prices up. We have a good volume of customers coming in, we don’t want to lose them, but every day something goes up in price. I don’t know how we’re going to cope,” Niazi said.

The haddock, cod and other white fish he imports are priced in dollars, and that cost had already surged since July, when Britain’s government imposed a 35% tariff on Russian seafood imports as part of sanctions over the war in Ukraine.

Niazi’s concerns about the sliding pound are echoed by other businesspeople...