Among businesses looking to grow, the majority cited the state of the domestic economy as the main potential barrier to growth (54.6%), with 69.5% reporting higher costs compared to Q2.

Just under half of businesses said resources used to create goods and services were the main driver of rising costs, while 37.3% reported fuel and utilities as the main contributors.

This and rising National Insurance and dividends taxes, as well as a 6.6% increase in the national living wage, may cause one in four to recruit less or reduce existing worker hours.

In a joint statement, Mike Cherry and Martin McTague, chair and vice chair of the FSB, said policymakers need to act now “if we’re to avoid a third straight quarterly decline in small business confidence”.

At a recent speech at the CBI conference, Prime Minister Boris Johnson suggested his Government will be able to tackle the problems businesses currently face, saying:

“I’m not going to pretend everything is going to be plain sailing, but don’t forget it was only last year [economic forecasts] were saying we would see an unemployment crisis on a scale not seen since the early 1980s … we [now] have the number of people back at work at pre-pandemic levels.”

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