Federation of Small Businesses: Concern for small firms despite growth
The Federation of Small Businesses (FSB) has warned that the future for small businesses is uncertain, despite unexpected growth in the UK economy.
Office for National Statistics figures have revealed that GDP rose by 0.1% in November 2022 compared to the previous month, but fell by 0.3% for the three months to November.
The service sector grew by 0.2% in November and was the main driver of growth in the month.
November’s growth saw followed an increase in GDP of 0.5% in October. Reasons for the sharp slowing in growth include industrial action from both rail and postal workers.
However, much of the growth in October can be credited to a bounceback after business closures during the funeral of HM Queen Elizabeth II.
Between July and September, UK economic output shrank by 0.3%.
Despite this better-than-expected growth, the FSB urged caution for smaller businesses.
National Chair of the FSB, Martin McTague, said: “The 0.1% growth in November is encouraging, but the concerns that small businesses have over the economy’s direction of travel have not been laid to rest, even though the men’s football World Cup gave a fillip to the hospitality sector as people gathered to watch games.
“With costs remaining high for small firms and households alike, policymakers cannot rest on their laurels. Inflation needs to be brought down, there remains huge uncertainty over energy prices, and consumer confidence remains stubbornly low.
“We’re hearing from small businesses who aren’t just worried for themselves and their own firms – they are worried for the future of their fellow local businesses, and the vibrancy of their community.
“The recently-announced Energy Bill Discount Scheme will do little to stem these concerns. It is utterly inadequate given the scale of the challenge at hand, with countless small businesses teetering on the edge, and will likely see some firms forced to increase prices in April.
“The very last thing we need is accelerating closures of small businesses, leading to a lower level of economic activity, fewer jobs, and, ultimately, less tax revenue for public services.”