CONSUMERS could be hit be rising prices in the coming months after an increase in the number of Oxford companies reporting ‘significant financial distress’, it has been warned.

A survey by business recovery practice Begbies Traynor found 776 businesses in the city reported significant distress in the first quarter of this year – 60 more than the previous quarter.

Financial distress indicates a condition when a company breaks its promises to creditors or honours them with difficulty.

Begbies Taylor said that growing uncertainty over the UK’s future trade links with Europe and with rising inflation were the main factors.

Food and drug retailers were the worst hit businesses –with 20 reporting significant financial distress in the first quarter compared to 15 in the previous quarter.

Julie Palmer, regional managing partner at Begbies Traynor’s Oxford office, said: “Given the scale of the increases in distress during quarter one it would appear that food suppliers, logistics firms and wholesalers are yet to fully pass on rising costs to their customers.

“But it is only a matter of time before we start to see this coming through, especially given the added margin pressures associated with the new National Living Wage.

“Once those costs ultimately feed through to consumers, we’d expect further pressure on sectors exposed to discretionary spending such as retail, bars and restaurants, travel and leisure.”