Business confidence plunges to recession level in 8-year low

Small businesses were gripped by pessimism in the fourth quarter as sentiment plunged to an eight-year low on the eve of December’s general election.

Craig Beaumont: Incoming UK government must deliver on promises to small business. Picture: Contributed

The Federation of Small Businesses’ (FSB) confidence index hit its lowest point since the last recession at -21.6, marking an unprecedented sixth consecutive negative reading.

The UK’s small business community cited concerns over political uncertainty, the direction of global trade and rising employment costs ahead of the vote.

Close to half (46 per cent) of small firms predicted that their performance will worsen over the coming three months, while fewer than a quarter (24 per cent) expected performance to improve.

The UK economy continued to be regarded as the leading barrier to expansion, flagged by 64 per cent of the more than 1,000 small firms surveyed.

Director of external affairs and advocacy Craig Beaumont said: “This quarter, the added uncertainty that accompanies a general election made it even harder for small firms to plan, hire and increase profits.

“They say that the night is darkest before the dawn, and small firms will be hoping that holds true. The incoming government has made some very positive commitments to the small business community – particularly where connectivity, employment costs, business rates and late payments are concerned – it now needs to deliver. We must secure a pro-business future trading arrangement with the EU, one that protects the three t’s: trade, talent and transition.”