Budget could hand economy £60bn if small businesses supported
Small businesses could provide a £60bn injection to the UK economy if the Autumn Budget meets firm’s needs, fresh research has indicated.
Fresh research from Barclays Business Prosperity Index showed small and medium-sized enterprises (SMEs) were playing it cautious ahead of the Budget, even more so than their larger corporate counterparts.
Firms hit pause on investments amid jitters on the road to 26 November, with cash inflows falling 1.9 per cent year-on-year in the third-quarter but savings growing 6.1 per cent as SMEs constructed “precautionary savings buffers”.
But despite the nerves, eight in ten said they were likely to hike investments into the UK if the Budget introduces supportive measures.
The bank’s research has suggested a £60bn opportunity for the UK economy could open up if SMEs were to invest at rates in line with larger companies.
Businesses look for costs reprieve
Top issues on the docket for businesses included a reduction to operating costs, which ranked as the top ask from bosses.
Small businesses were stung by the double blow of changes to the employer’s national insurance and the hike to the national minimum wage in the 2024 Budget which led to firms’ operating costs soaring.
Over a third of firms also called for better access to finance, an issue the Treasury has attempted to combat through interventions with the UK’s top banking giants.
In June, high street banks ramped up SME lending to the highest levels seen since 2022.
Matt Hammerstein, chief executive of Barclays UK Corporate Bank, said SMEs were adapting to a “new world order” following the chaos triggered by President Donald Trump’s tariff offensive but required continued support.
Meanwhile, new research from specialist lender Shawbrook has called for greater government clarity in the Budget for mid-sized businesses.
Nearly 80 per cent of firms said they feel overlooked by Government policy with a ‘support gap’ that caters towards early-stage startups or large corporate entities.
Neil Rudge, chief banking officer for commercial at Shawbrook, said: “There is a palpable ‘support gap’ where policy measures are missing the mark for this vital segment.
“It’s not just about introducing new schemes, but making existing support straightforward and more accessible.”