UK SMEs say specific Government initiatives designed to help them survive and grow don't go far enough, according to new research from independent funder, Bibby Financial Services ("BFS"). The Q3 2025 SME Confidence Tracker, which surveys 1,000 UK SMEs, reveals that over half (52%) of small businesses believe measures such as the Fair Payment Code, Late Payments Review* and the British Business Bank's Bank Referral Scheme fail to protect and support them.
This 3.5% increase, equating to 191,000 new businesses since last year, is a testament to the resilience and entrepreneurial spirit driving our economy, and it is heartening to see so many individuals taking the initiative to establish their own ventures, but as chancellor Rachel Reeves recently said, the UK's economy "isn't broken, but it does feel stuck". Addressing this issue needs to be a priority for the survival of SMEs within turbulent market conditions.
We address critical topics such as the recent shake-ups at the USPTO, the controversial "patent tax" proposal, how despite the fact that the USPTO is user-fee funded it is being swept up in broader Trump Administration efforts to downsize the federal government, what the word "innovation" really means, how businesses use intellectual property assets, the importance of predictable IP assets, the challenges of effective patent valuation, international collaboration and education to support small and medium size enterprises (SMEs), and much more.
The Bank of England's decision to maintain the base interest rate at 4% until 2026 offers UK SMEs a rare opportunity amidst these ongoing economic challenges. This stability is crucial as inflation remains at 3.8%, creating a complex landscape that demands careful navigation by businesses. However, while stable interest rates can provide predictable borrowing costs - enabling SMEs to plan investments and manage cash flow - persistent inflation means that operational expenses are still rising, putting pressure on profit margins across various sectors.
When asked about their plans for the rest of 2025, just under half (48%) of SMEs leaders revealed they are looking to upskill their current team, by far the most popular answer. This compares to 29% who plan on expanding their leadership team and a quarter (25%) who plan to hire new staff. This strategic focus on developing internal talent reflects wider concerns about recruitment challenges.
Reeves is thought to be focusing on fiscal responsibility while aiming to stimulate economic growth. Her initial statements suggest an inclination towards maintaining existing tax policies without introducing major increases: this approach aligns with the desires of many SMEs, who are seeking stability in a tumultuous economic landscape. However, there are concerns that this might not go far enough in addressing the immediate needs of small businesses, especially in terms of financial relief and support.
Three in 10 UK SMEs fear losing up to £20,000 due to Trump's new trade tariffs, making energy savings essential. Business energy experts recommend conducting energy audits to find savings.
The biggest mistake we see is overthinking," explains Sarah Mitchell, CEO of EcoWrap, whose biodegradable packaging solutions now serve clients in 12 European countries. "We spent six months researching every possible regulation and requirement, when we could have started with one country and learned as we went.
SMEs are planning pay and recruitment freezes in response to government tax rises, with a distinct focus on limiting expenditures and innovation.
This is undoubtedly a challenging time for businesses, but our research shows some glimmers of hope. Strong domestic demand, powered by online sales, can help UK firms grow over the coming months.
