Small businesses fear recession is going to get worse, says FSB

Published: 18 August, 2011

Small businesses and retailers fear the economic conditions are going to get worse over the next six months,according to the Federation of Small Businesses, 'Voice of Small Business' Index.

As part of its latest poll nearly two-fifths (37%) of businesses that responded to its survey said they expected their prospects to be worse in the next three months, compared to 21% that expect to see an improvement.

The Small Business Index - which measures the confidence of small businesses across the UK - has been in the negative since the start of 2010, with retailers reporting a negative index of -25 in quarter two, seven points lower than the -18 confidence figure at the end of the first quarter.

John Walker, chairman of the FSB, said shops that are continue to discount to get shoppers through the door will not help their bottom line.

The FSB has joined other industry groups, including the hospitality sector, to call on the government to reduce VAT to certain business sectors to 5%.

"Businesses in the retail sector are feeling the brunt of the consumer downturn more than most sectors, as customers stay away from shops and household budgets are squeezed."

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