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Small business confidence in the UK saw a slight improvement in Q3 2023, as per the latest Small Business Index from the Federation of Small Businesses (FSB). The headline confidence reading for this quarter was -8.0 points, showing progress from the -14.2 points in the previous quarter but still lower than the -2.8 points in Q1.

This decline in confidence over the last six quarters can be attributed to factors such as rising inflation and the energy crisis. The hospitality sector had the lowest confidence level, with accommodation and food services scoring -31.1 points. Retail and wholesale were close behind at -22.8 points, and construction, manufacturing, and information and communication sectors also reported negative confidence. The only sector with a positive confidence reading was professional, scientific, and technical services, at 6.9 points.

FSB emphasized that the low confidence in the hospitality and retail sectors highlights the need for additional support. The upcoming Autumn Statement offers an opportunity for the Government to introduce measures, such as extending the 75% business rates relief for SMEs in retail, hospitality, and leisure.

Martin McTague, FSB’s national chair, stated, “Our latest Small Business Index shows signs of stabilisation in small firms’ performance after the economic challenges of the past year and a half. Although there’s been improvement since Q2, we aim to see confidence firmly back in positive territory, rather than eight points below zero, where it currently stands.”