The UK’s gross home product (GDP) rose by 0.1% final December and by the identical determine within the closing three months of 2025, however the Federation of Small Companies (FSB) mentioned any positives are usually not being felt by small corporations.
Responding to the Workplace of Nationwide Statistics information, chancellor Rachel Reeves mentioned the UK’s economic system grew the quickest among the many European G7 nations in 2025.
She admitted “there’s extra to do”, however claimed “we’ve created the circumstances for development and I’m assured this would be the yr we are going to see the outcomes of that”.
The GDP development figures have been slower than economists had predicted.
Commenting on the information, FSB coverage director Tina McKenzie, mentioned:
“Small enterprise house owners trying on the GDP outcome for December – whereas being relieved that it was not less than weakly optimistic – can be forgiven for feeling that it largely seems to have handed them by. A small uptick in a essentially very broad determine shouldn’t disguise the powerful actuality being felt on the bottom.
“The Autumn Finances didn’t do sufficient for small companies and self-employed folks, though it was acquired with some shock and reduction by giant corporates, whose big stability sheets already present them with a cushion in troublesome buying and selling circumstances.
“The price pressures on small companies and self-employed folks have constructed and constructed, and too many inside the neighborhood at the moment are at a really harmful level. Late funds from giant firms are exacerbating the ache they’re feeling, whereas the prospect of a ‘prices timebomb’ hitting in April – a doubtlessly deadly mixture of upper enterprise charges payments, hikes to standing expenses on power payments, and a better Nationwide Dwelling Wage – presents a second of actual hazard to small corporations.”
“Final yr was one many small enterprise house owners would like to neglect. Confidence fell in each quarter, in keeping with our analysis, ending in a post-COVID nadir of -71 factors within the closing three months of 2025. The sluggish efficiency of the UK economic system was the top-cited barrier to small corporations’ development prospects throughout all 4 quarters of final yr, adopted by the tax burden, displaying how small companies and self-employed individuals are caught in a tough spot, between low development and rising mounted prices.”
McKenzie added that the federal government wants to put extra of a focus on rebuilding small enterprise confidence ranges and inspiring them to develop, given the important thing function small corporations play within the economic system.
She mentioned the subsequent King’s Speech ought to embrace a invoice to deal with late cost, and the Spring Forecast on 3 March must be used to announce new measures to help small companies.
On Wednesday, a significant report by the Enterprise and Commerce Committee warned small companies are “dealing with pressures similar to the pandemic” which pose a “actual threat to enterprise viability”.
