Home Economy UK economic outlook far from certain, warns Federation of Small Businesses
“The unemployment rate is at historically low levels, but this does not seem to be translating into broader business confidence…”
The Federation of Small Businesses (FSB) has warned that, while the latest UK job numbers suggest the labour market is continuing to show signs of strength, the overall economic outlook is far from certain.
The latest UK jobs numbers show unemployment falling to 1.65 million, down by 54,000 from the previous period, with the unemployment rate now at 4.9%.
Wage growth has risen slightly – with average earnings, including bonuses, up by 2.3%, a slightly raised rate of growth compared to the previous period.
But although these latest figures are welcome, they were collected before the result of the EU referendum was known, says the FSB.
It warns that since the referendum, markets have fluctuated considerably and many business owners are reported to be cautious about the future health of the economy.
The latest FSB Small Business Index – also taken before the referendum – revealed small business confidence at a four-year low following the largest annual drop in the Index since it started in 2010.
Mike Cherry, FSB national chairman, said: “The unemployment rate is at historically low levels, but this does not seem to be translating into broader business confidence.
“Clearly there are other factors at play which, although not hitting jobs now, are causing business owners to take a cautious approach.
“Small businesses are already dealing with considerable new cost challenges, including the National Living Wage and pensions auto-enrolment deadlines.
“With the result of the EU referendum bringing even greater uncertainty about the future – small business will need reassurances from Government that it will support them and listen to their needs throughout the coming negotiations.”