LONDON • Confidence among small British firms and employers has fallen to the lowest level since the aftermath of the Brexit vote, according to two separate surveys published yesterday.
Rising labour costs, taxation and rent are all bolstering operating costs, the Federation of Small Businesses (FSB) said. There are also concerns about a weaker domestic economy and flagging demand, and confidence at consumer-facing companies is among the lowest in the sectors surveyed.
For exporters, the pound’s decline since the Brexit vote last year means they are more optimistic about their prospects. The proportion of firms reporting an increase in overseas sales is at a three-year high, according to the FSB.
The UK economy expanded just 0.3% in the second quarter, below the average among Group of Seven nations, a situation that Bank of England governor Mark Carney says could persist through the middle of next year. At the same time, inflation has picked up to almost 3%.
Carney also said this week that Brexit could cause “abrupt decreases in migration” in the short term, creating labour shortages in some sectors and contributing “more materially to inflationary pressures”.
That view was echoed in a report by the Recruitment and Employment Confederation, which found that firms are concerned about filling vacancies in the future.
“There are now just 1.9 unemployed people for every vacancy, and net migration from the European Union is falling, which means the pool of people available to employers is shrinking,” said REC CEO Kevin Green. — Bloomberg