FSB: small business confidence remains low despite job growth

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Positive signs of growth in the UK jobs market are not proving sufficient to dispel the feeling of caution among small to medium-sized enterprises (SMEs) about the current business climate.

This is according to the Federation of Small Businesses (FSB), which has responded positively to news that the country's unemployment rate remains at historically low levels, while cautioning that larger economic issues are preventing this from translating into increased business confidence.

The latest data from the Office for National Statistics has indicated that employment numbers rose by 55,000 during the February to April period, while unemployment was down by 20,000. Wage growth has also risen slightly, with average earnings including bonuses up by two per cent, consistent with the previous report.

Despite this, the FSB pointed out that its most recent Small Business Index showed small business confidence is at its lowest level since 2013, with current market fluctuations and political uncertainty likely to continue to dent optimism for several months.

The impact of recently-introduced legislation has had an effect, while many companies continue to worry about the outcome of this week's referendum on the UK's membership of the EU. Depending on the result from the June 23rd vote, the country could be on the brink of a period of considerable economic and political upheaval and change.

Mike Cherry, national chairman of the FSB, said: "Small businesses are already dealing with considerable new cost challenges, including the National Living Wage and pensions auto-enrolment deadlines. Whatever the result of the coming EU referendum, small business will need reassurances that the outcome will not increase the cost of doing business."