Small businesses feeling the hit due to surging costs of working

OUR economic recovery is stumbling when it’s barely had a chance to come out of the gate, according to the Federation of Small Businesses.

The FSB was responding to new Office for National Statistics (ONS) figures which showed that GDP fell 0.1 per cent in March and the UK’S trade deficit, at £25.2 billion, is at its greatest since records began.

Federation of Small Businesses national chairman, Martin

Mctague, said: “Small business owners were feeling bullish at the start of this year, paving the way for a summer trading season that would have had it back on track.

“That rebound in activity is now at serious risk, with surging costs weighing heavily on our economic potential.

“We hear a lot from politicians about the cost of living crisis, but very little about the cost of doing business crisis which underlies it.

“Producer price inflation has been surging ahead of consumer price inflation for some time now, with businesses trying to absorb the difference.

“There comes a point, however, when they have no choice but to pass on more of their spiralling costs to customers.

“Consumer-facing firms, having been hardest-hit over lockdowns, are now caught between customers less willing to spend and the need to increase prices to cover surging outgoings, leading to a serious contraction in services output.

“The 15 per cent fall in output for vehicle repair and MOT service centres is particularly worrying for that sector, as people travel less due to fuel costs.

“The economy has hardly grown over the past two years, and we now have an indication that it’s shrinking again.”