People 'spending less' during Iran war - businesses

As the US-Israel war with Iran enters its fifth week, the economic uncertainty caused by the ongoing conflict is being felt thousands of miles away by businesses with key connections in the Middle East. Firms in West Yorkshire have shared their immediate concerns and "what might be on the horizon" if it continues.

John Varey, who runs Blossoms and Co, a florist and event company in Bradford, said the situation had caused the difficult combination of rising costs and people spending less.

"Obviously with all the fuel costs and the disruptions in flights, it's making things a lot more expensive and we can't get a lot of things we would normally get," said Varey.

Roses are a lot harder to come by, he said, with a global price rise of approximately 30% on "mainstream stems" like the popular romantic gift.

Last week, experts warned that the UK was facing the biggest hit to growth from the Iran war out of the G20 major economies, according to an influential global policy group.

Fertiliser is usually shipped through the Strait of Hormuz, but that is only open to a limited number of ships as a consequence of the war.

"All the prices for them have gone up," Varey said, with the Middle East situation compounding existing cost of living issues.

"It's affecting my staff. I'm having to work longer hours. They're working less hours. We're even closing earlier to try to save energy costs."

Sound Leisure has produced over 100,000 jukeboxes from its Leeds-based factory in Seacroft, with its product exported to 28 countries around the world.

"The biggest problem for us at the moment is international trade, because we export roughly 70% of everything we manufacture," said Chris Black, the firm's co-chairman.

"At this moment in time, people that are living in Dubai who are our type of customer, a lot of them wealthy individuals, they're leaving Dubai now.

"Our Dubai distributor has seen his business suffer, obviously that then passes on to us in the UK.

"We're pretty hopeful that things will turn around quickly when things do calm down, whenever that will be.

"Then we've got the problem of how long will it take to recover?"

The business said the war has been the most recent hurdle to navigate after Brexit and the pandemic.

"Like Covid, there were ships rerouted everywhere and nobody quite knows where those ships will be and how long it will take," he said.

"It will take months to work through the system, if not years."

Elsewhere in Leeds, it is a similar story for David Brisk, sales director at commercial printing business DP Sign and Display.

"We have products where the raw material is actually mined from the Middle East," he said.

"Because of that we have caught wind in the last couple of weeks that we could see some rises on these materials, between 6% and 26%, and that's going to cause us a real issue."

The company manufactures signage and display materials across different sectors like construction, education, medical companies and museums.

"We really pride ourselves on quoting really fast holding costs for 28 days, but some of these suppliers are saying we can hold the cost for five days," he said.

"We can't assure our customers moving forward that the price we quote today is the price we can do in three months and some projects take six months to get over the line."

He said businesses like his had been through an "unbelievable amount of circumstances" over the last decade.

"The various tariffs, the oil prices, the rises of national insurance, the cost of living generally, all of this just puts us under so much pressure."

Chancellor Rachel Reeves said the Iran war would affect the UK, but "in an uncertain world we have the right economic plan".

"The decisions we have taken have put us in a better position to protect the country's finances and family finances from global instability," she said.

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