Small Business Confidence “Plummets” due to Economic Uncertainty
“Less than friendly” statements from George Osborne regarding small enterprises are thought to have contributed to the change in attitude
Small business confidence in the economy has dropped by 11 points since the last quarter. according to a report by Smith & Williamson.
Concerns over the economy and two “less than friendly” statements from George Osborne regarding small enterprises are thought to have contributed to the change in attitude.
In the Summer Budget, the chancellor of the exchequer announced changes to the taxation of dividends and in his Autumn Statement he put forward his plan for quarterly tax reporting by 2020.
Optimism, among respondents to the survey, for their own prospects over the next 12 months has also declined by eight points to 74%.
There is little support for an interest rate rise with 24% of businesses claiming confidence is being adversely affected by the Bank of England maintaining interest rates at historically low levels.
Despite the negative shift in outlook, over 64% of small businesses surveyed said they plan to increase staff next quarter. 50% said they believe the UK employment pool to be adequately trained; highs not seen since the end of 2013.
Guy Rigby, head of entrepreneurial services at Smith & Williamson, said:
“Uncertainty over UK interest rates, economic troubles in China, a potential Brexit and upcoming US political instability will continue to trouble financial markets throughout 2016 and so this declining confidence could be a sign of things to come.
“With optimism surrounding recruitment normally reaching its peak at the start of the calendar year, it will be fascinating to see whether the Enterprise Index can maintain its strong reading if this early year hopefulness recedes.”