FSB fears recession as business confidence slumps

Confidence among small businesses across Britain has fallen to its lowest for four years, according to a survey carried out by the Federation of Small Businesses whose chairman Mike Cherry claimed that, for the first time since 2009, the UK faced a real chance of recession.

“To head this off, we need to do everything we can to support small firms to grow, create jobs and weather the harsh economic headwinds,” said Cherry. “Even before the EU referendum result, our members were reporting tough business conditions right across the country. The referendum result has settled the question of UK membership of the EU but there are many questions left unanswered.

‘While these remain we must take steps to shore up the economy and support UK small businesses. We need ministers to take stock and roll back any plans which will make doing business more difficult or costly. This should include ending moves to introduce disruptive digital tax reporting and honouring commitments to expand small business rate relief. For the first time since 2009, the UK economy faces a real chance of a recession.”

A government spokesman said: ‘While any reports of a drop in small business confidence are disappointing, government is working hard alongside businesses and trade organisations including the FSB to deliver the best outcome for businesses of all sizes following the referendum result.”

The survey of 1,000 FSB members was conducted in April and May. Over half of small businesses reported an increase in their overall costs of operation during the past three months compared with the same period a year ago while the number of businesses reporting that taxation was a main cause of changing costs almost doubled compared with a year ago.