Confidence amongst UK small firms has fallen to its lowest level since the aftermath of the EU referendum, data published by the Federation of Small Businesses (FSB) has revealed.
According to the FSB’s latest Small Business Index (SBI), confidence fell to +1 during the third quarter of 2017, down from +15 in the second quarter.
63% of small firms identified the domestic economy as being a ‘barrier to growth’, whilst 35% highlighted consumer demand as being an obstacle to growth.
The SBI also revealed that 13% of small firms now expect to either downsize, hand on or close their business. Meanwhile, 70% of businesses have reported an increase in operating costs: labour, taxation and rent have all been cited as having contributed to this rise.
Mike Cherry, National Chairman of the FSB, commented: ‘Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among small firms and consumers alike.
‘With conference season and the Autumn Budget approaching, policymakers have an opportunity to restore optimism.
‘Small firms will be looking to the Chancellor to extend a lifeline at the Budget. In such a difficult trading environment, any new tax grabs or loss of relief for entrepreneurs would exacerbate existing challenges.’