Confidence hits four-year low as UK votes to exit the EU

Confidence among small businesses has hit a four-year low since the EU referendum result to exit the EU, with one retailer predicting “nothing but darkness ahead”.

According to the Federation of Small Business (FSB) Small Business Index, the last quarter saw the largest annual drop in confidence since its records began – it suggested that the EU referendum result, coupled with existing concerns, was the cause.

Sunita Kanji, owner of a Family Shopper in Manchester, said: “The financial state of the country is worrying. We’re facing rising wages and the pound’s value is lowering. We’ll need to put prices up to protect our margins.”

Joga Uppal, owner of One Stop Mount Nod in Coventry agreed that the outcome of the referendum was damaging to the industry.

“The economic uncertainty isn’t good for anyone,” he said.

Meanwhile, Peter Lamb, owner of Lamb’s Larder in Bells Yew Green, East Sussex, told Retail Express that the UK would lose out socially and economically.

“Britain was becoming a beacon of Europe, and now we’ve hit a wall,” he added. “There’s nothing but darkness ahead.”

The FSB called on policy makers to take immediate steps towards lowering costs for small businesses.

“Even before the EU referendum result, our members were reporting tough business conditions right across the country,” said Mike Cherry, FSB national chairman.

We’re facing rising wages and the pound’s value is lowering. We’ll need to put prices up to protect our margins

Sunita Kanji, Manchester

“We need ministers to end moves to introduce disruptive digital tax reporting, and honour commitments to expand small business rate relief. The Low Pay Commission should be vigilant when recommending next year’s national living wage.”

The ACS said it would also be campaigning to ensure wages and business rates are set at appropriate levels.

The UK’s decision to exit the EU has also prompted concern over the rise in racism and xenophobia.

Lamb, who is Australian, was among several retailers that reported cases of verbal abuse following the referendum result. “The vote has legitimised the voice of racism. It’s a minority of the public, but it’s a vocal minority,” he said. “I fear for the future of the country.”

The Metropolitan Police was placed on heightened alert after a rise in hate crime in the capital and around Britain. Initial figures showed a 57% increase in reported incidents between June 23 and 26  compared to the same period four weeks earlier.