Despite improvements in the state of the UK economy, small businesses are still struggling to recover as they face rising costs.

Energy bills are the costs that have seen the biggest rise, with 87 per cent of businesses telling the Forum of Private Business that they are higher than ever.

From the survey of the FPB members, it was found that small businesses are facing an uphill struggle to ensure that they are able to pay the higher costs.

The majority (94 per cent) of businesses said they have seen an overall increase in their business costs. Energy costs were the highest increase, closely followed by transport costs, marketing costs as well as rising costs in raw materials and stock.

Alexander Jackman, FPB’s Head of Policy, said: “The major reasons for increases in prices are predominantly down to transport and energy prices rising, couple with the continued weakness of sterling for importers.

“The economic outlook may be better, but costs still remain an issue.”

Almost half (41 per cent) of small business owners admitted that they have been unable to pass their costs on customers, meaning that they have had to cut their own costs to keep their prices the same.