The latest FSB report revealed a significant drop in confidence among small businesses, primarily due to soaring employment costs, with a score of -10.8 in Q2.
Tina McKenzie, FSB's policy chair, expressed that rising labour costs could stifle economic growth and warned of potential government reforms exacerbating the situation for small businesses.
The construction industry was highlighted as the least optimistic sector, with a score of -20.7, and retail and wholesale sectors also followed closely in a decline.
McKenzie urged the government to index the employment allowance to the living wage to help alleviate the pressure on small firms struggling with rising costs.
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