Published Tuesday 4th January 2021

The last 18 months have seen unprecedented challenges for UK businesses, with the significant upheaval caused by both Brexit and the COVID-19 pandemic. The unwelcome news is that the repercussions of both will likely last well into 2022, but businesses can mitigate against these with some planning.

Here are five of the biggest challenges facing UK businesses in 2022:

Financial Challenges

The tail end of 2021 has been marked by a spike in living costs driven by rising energy prices. This – coupled with the economic cost of the pandemic and continued supply chain issues – has led to inflation which could reach 5% in 2022 according to the UK Government.

This rise in inflation will most likely lead to a rise in interest rates, and the Governor of the Bank of England has already issued a cautionary statement about this. With the cost of borrowing set to increase, businesses will need to review any loans in place and look to obtain favourable rates ahead of potential rises.

On top of that, 2022 will also see a slew of tax changes, such as the end of the COVID VAT deferral scheme and the introduction of a plastic packaging tax, as well as the increase in National Insurance rates.

Supply Chain Challenges

Sadly there is no end in sight for the supply chain issues that have been ongoing since the latter half of 2021. A combination of red tape caused by Brexit and COVID-19 restrictions leading to staff shortages has led to already creaky supply chain infrastructure almost grinding to a halt.

These developments mean the just-in-time model adopted by many businesses is no longer the best option, and holding more stock is now preferable. Dan Swan, McKinsey Operations expert, has stated that supply chains are no longer a necessary evil but a real differentiator for companies.

The Green Transition

Climate change is now a very real concern for many businesses. According to a 2021 Deloitte report, companies are actively concerned about the impact of climate change, with climate-related disasters and scarcity of resources featuring highly on lists of business concerns.

Linked with this is increased focus on sustainability as the public becomes increasingly environmentally savvy. Businesses need to be able to walk the fine line between their environmental footprint and their balance sheets.


Digitisation is more important than ever, thanks to the remote working revolution powered by the COVID-19 pandemic. Businesses who aren’t able to keep up with technology will find themselves struggling and Deloitte has confirmed that companies on the path to digital transformation perform better financially.

Technology such as AI can also help businesses save money, become more efficient and even help with some of those supply chain issues. Despite this, many businesses are still lagging behind and are struggling to find the funds required to digitise.

Human Resources

The Great Resignation has marked 2021 as businesses everywhere struggled to retain employees and recruit new ones. This seems to be largely a result of the pandemic, as people suffered from burnout and shifted their focus from their current job. In the UK this has been further compounded by Brexit, which has resulted in the depletion of the workforce.

These resourcing challenges will continue into 2022, so it’s important for employers to demonstrate the levels of flexibility that employees want. Embracing ‘happynomics’ – the economics of personal happiness and wellbeing – will also be key.

Make sure you’re ready for 2022 by contacting our expert team at Expense Reduction Analysts and enlisting us to future-proof your supply chains.