Brexit hits small business confidence

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Brexit hits small business confidence (iStock/altamira83)

Small businesses are less confident about the future than they were before the referendum on Britain's membership of the European Union.

This was the key finding of the quarterly survey by the Federation of Small Businesses (FSB) of its members between July and August, showing the second largest fall in confidence in the history of the survey and the first time more firms have expected matters to get worse rather than better since 2012.

Brexit alone may not explain the fall in confidence, as this was the third quarter in a row where business optimism had declined, but it suggests that there is a widespread feeling that the general expectation of a slight economic slowdown has been exacerbated by deep fears about what the outcome of the referendum could mean for the economy in the months and years ahead.

Noting the combination of these factors, FSB chairman Mike Cherry said: "The political shock of the Brexit result has taken place at a time of weakening business confidence."

He added: "Small firms are resilient and will survive the current fragile economic outlook, but to avoid an economic slowdown this data should be a wake-up call for our elected politicians."

Such resilience may be seen in the number of small businesses planning to grow in the next 12 months, with 55 per cent seeking to do so, the highest share since the end of 2015. At the same time, the number expecting to downsize, sell up or close fell to 11 per cent.

While many small businesses are fearful about the effect Brexit might have on them, there are some small business owners who have welcomed Britain's upcoming departure from the EU.

One of these, Wilson Boardman of Micromix Plant Health in Nottingham told the BBC Brexit is a chance to "get out from under the regulatory heel of Brussels". He said that far from being worried about not being in the single market, Britain should seek a deal with the EU like the one South Korea has, which does not require it to accept any immigrants from the EU.