SME confidence has fallen dramatically

In the latest report from the Small Business Voice Index, provided by the Federation of Small Businesses, confidence has fallen dramatically. High inflation as well as rising utility bills has led to a reduction in consumer spending. This has hurt small businesses across the UK.

More than 1500 businesses responded in the Index, and the result was the lowest score since the Index began in 2010. It fell by 15.2 points in the latest quarter to -24.5, and it doesn’t seem likely to improve any time soon.

The Federation of Small Businesses (FSB) wants the Government to boost confidence by acting on the policies that it has already announced. This would boost the economic recovery of the country, as it is relying on investment in businesses in order to create new jobs.

In the Autumn Statement, the Government outlined many policies which have been supported by the FSB, such as encouraging banks to lend to smaller businesses, and also to encourage investment via the investment scheme termed ‘seed enterprise’.All of this will take time to have an effect. One in eight companies expect the economic situation to worsen in the next three months, so this will need to be implemented as soon as possible.

The Chairman of the FSB, John Walker, said that before things can get better, they will probably get worse. They believe that if the policy proposals are turned into actions, as promised, then 2012 can become a “doing year” in order to permanently change the environment for small businesses for the better. If inflationary pressure decreases, then entrepreneurs will be able to take advantage and flourish accordingly.