A survey has found that small businesses' Brexit fears have only increased in the time since the vote 16 months ago.
The Capital Economics index of business optimism, commissioned by Amazon, fell from +5 in September 2016 to -8 this year, affected by ongoing Brexit negotiations, political uncertainty and rising inflation. The results echo those from a survey by the Institute of Chartered Accountants in Q2.
Confidence in the UK economy as a whole fell from an already low point of -13 to -22. Businesses in all regions except the West Midlands expect conditions to deteriorate in the year ahead, ranking high inflation and political uncertainty as their top areas of concern.
Mark Pragnell, chief project economist at Capital Economics, said, "A year ago, shortly after the EU referendum vote, SME confidence in their own businesses was positive.
"However, over the last 12 months SMEs have witnessed a series of key political moments, from the triggering of Article 50 through to the snap General Election which may have contributed to the swing of confidence,"
Compared to the 39 per cent of SMEs who thought that Brexit would turn out badly, only 12 per cent of SMEs thought that it would have a positive impact - with a weaker pound leading to stronger exports.
However, that export strength is yet to be seen, with the UK making a record trade deficit in goods in August. According to the Office for National Statistics, the UK exported £28.1 billion of goods that month while importing £42.4 billion: a £14.2 billion deficit.
More than half of UK exporters said that the EU region was one of their most important customers in the past year.
Although Doug Gurr, Amazon's UK country manager, has advised SMEs to embrace digital to mitigate the risks of the near future, there is no evidence that the government understand just what this means.
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