Small companies had low confidence before Brexit, says study
Confidence among small firms was at a four-year low even before the EU referendum, which has sparked uncertainty across the economy, according to a new study.
A survey of more than 1,000 members of the Federation of Small Businesses (FSB) found that only one in eight planned investment in the next year, down from almost a third 12 months ago.
The research, conducted between April and May, found that smaller firms were planning job cuts.
Mike Cherry, FSB chairman, said: "Even before the EU referendum result, our members were reporting tough business conditions right across the country.
"While the referendum result has settled the question of UK membership of the EU, there are many questions left unanswered.
"While these remain we must take steps to shore up the economy and support UK small businesses.
"We need ministers to take stock and roll back any plans which will make doing business more difficult or costly.
"This should include ending moves to introduce disruptive digital tax reporting and honouring commitments to expand small business rate relief.
"For the first time since 2009, the UK economy faces a real chance of a recession. To head this off, we need to do everything we can to support small firms to grow, create jobs, and weather the harsh economic headwinds."
A Government spokesman said: "While any reports of a drop in small business confidence are disappointing, Government is working hard alongside businesses and trade organisations including the FSB to deliver the best outcome for businesses of all sizes following the referendum result."