Small businesses are sounding the alarm over the future of the UK economy

‘A giant cleaver is wreaking havoc on our economy’ – Bristol-based butcher Ruby & White.

Image ©Adobe Images

The UK economy contracted less than expected in the last quarter, but its fundamentals are weakening, with financial difficulties increasingly becoming a constraint within the small business sector and the linchpin of the labor market.

Data from the Office for National Statistics suggested on Friday that professional forecasters were being overly pessimistic with their projections for the UK economy through June and the second quarter, although that did little to change a reality increasingly bleak for the country’s small businesses.

UK GDP fell -0.6% in June and -0.1% in the second quarter, while forecasters had on average expected a contraction of -1.2% in June and a decline of -0.2 % in the second trimester.

But the sentiments expressed by small businesses on the country’s high streets justify the growing worries of economic watchers.

Some of those sentiments are expressed here by the founders and in many cases the owner-operators of small businesses ranging from the innovative to the obscure, while spanning the business gaps between traditional brick-and-mortar retailers and offices. of advice.

Dave Kelly, co-founder of Bristol-based butcher Ruby & White:

“A giant ax is falling on our economy and the government is just watching. Inflation, soaring energy bills, tax hikes and interest rate hikes are crippling people and small businesses.”

Keith Budden, managing director of Hampshire-based IT security firm, Ensurety:

“Our leaders need to pull themselves together and grab the helm before the whole boat sinks.”

Ed Rimmer, CEO of Bath-based SME finance provider Time Finance:

“Over the past six months, there has been a significant shift in business optimism. At the end of last year, the businesses we spoke to were optimistic about the future, with a third expecting to invest and increase their workforce.”

“Fast forward six months and it’s a very different perspective. One in ten businesses now say they are struggling to meet their current financial responsibilities.”

“If nothing is done quickly, these companies will not survive.”

“Employers are under a lot of pressure right now. Many are simply unable to raise their prices to meet the rising cost of living and as a result we are locked in a vicious circle. Drastic action is needed. »

Dr Jackie Mulligan, expert on the government’s high street task force and founder of local shopping platform Shopappy:

“Unfortunately, this is probably the start of a very long and deep recession. From what we are seeing on the ground, the shrinking economy still has a long way to go. Millions of families and small companies find themselves in an incredibly difficult situation, financially and emotionally.”

“The terrifying level of inflation in particular is a double whammy for the small, family-owned businesses that line the high streets of the UK. They are being hit in the coffers and in their own pockets at exactly the same time.

“I hope the government steps in to help the thousands of family businesses struggling to stay afloat.”

Ollie Hayes, former professional rugby player, personal trainer and founder of So Fit Bath:

“As our economy shrinks and small businesses across all sectors are battered, a political pantomime is playing out in Westminster.”

“It’s more brutal now than it was during the pandemic, but the policy makers and the people running this country don’t seem to have any urgency. All should be given a red card.”

Mary Maguire, Managing Director of UK-wide recruiter, Astute Recruitment:

“Until the next Prime Minister is elected, we are economically rudderless. With the economy shrinking, businesses need decisive and capable leadership, but a vacuum of non-emergency stagnates across the Parliament.

“My worst fear is that MPs, the Bank of England, the IMF and others are actually dragging us into a much worse recession with their relentless tide of doom and gloom. The government must act quickly and decisively.

“Corporate tax should be maintained at 19%, employer and employee NI should be reduced, even if it is a temporary measure until April 2023.”

“And why not provide companies with opportunities for tax deductions on the cost-of-living fuel payments they pay to their staff?”

“A windfall tax on big energy suppliers who have made unprecedented profits this year could pay for that.”

Maryann Penfold, owner of Worthing-based artisanal hot sauce maker Boom Sauce:

“The economy is down with inflation and rising interest rates destroying small businesses every day. I’m really worried about the future of my own business because customers are spending a lot less.”

“I can’t raise my prices because it risks losing customers and I can’t lower them either because the cost of ingredients has skyrocketed. A lot of small artisan producers like me are in a catch-22 situation. Lowering prices while commodity costs are skyrocketing is simply not sustainable.

Sarah Newland, founder of business consultancy, Keyboard Smash:

“In today’s economic climate, customer purchasing decisions are extremely slow. Leads are fewer, cash flow is tighter, and more and more customers are walking away from contracts or finding reasons not to pay. »

“We have tightened our contracts and are focusing on promoting lower cost services. We are also committed to paying our agency’s freelancers within 7 days whether or not the money comes in.

“The government should engage in discussions with small businesses so they appreciate the crisis we are in, rather than creating blanket proposals that don’t affect people on the ground.”

Chris Maslin, director at Tunbridge Wells-based employee ownership specialist Go Eo:

“We have already had employees asking to work from home more because the cost of petrol to get around is hurting them. Some employers will do their best to give their staff pay raises to cover inflation, but not every company can do this without putting themselves at risk.

“If a prolonged recession sets in, things will be more than difficult for the average small business. When your customers are struggling, you can’t just raise prices to cover rising costs.”

Amy Sabin, from Wareham-based personal training company Future Fit Training:

“A large percentage of the population works for small businesses, so it is extremely important that these businesses survive. It is essential that the government listens to this sector and balances its needs with the different approach needed by big business in the difficult times ahead.

“There just doesn’t seem like there’s much urgency to deal with the current economic crisis, much like the mental health crisis that will almost certainly follow.”

Mark Richardson, Partner at Derby-based Chartered Surveyors, BB&J Commercial:

“I hope businesses are better prepared for a recession that could be very long than last time during the global financial crisis. It was a steep learning curve for many, and I hope the lessons have not The government is doing little at this time to intervene, but many of the factors contributing to our current economic difficulties are beyond its control.

Lewis Shaw, founder of Mansfield-based Shaw Financial Services:

“The economic outlook is dire. It feels like the country and the economy have been thrown against the wall; all the government cares about is this race for leadership, with no one caring about the magnitude of the problems that are developing.

“We are accelerating towards the edge of the cliff, the steering wheel has come off and the brakes have been cut. If we hit a five-quarter recession and unemployment rises, it will have a disastrous ripple effect across the UK. The economy will collapse and burn in the ravine.

Sarah J. Greer