Government Is Failing Small Businesses With Rising Costs And Fears Over A Recession - London...

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iwoca's latest SME Expert Index reveals that the Labour Government has had a negative impact on small and medium-sized enterprises (SMEs) during its first year in power, according to SME finance experts.

Almost three-quarters (70%) of SME finance brokers say that conditions for small businesses have deteriorated during the Labour Government's first year in office.

The Government has made little progress to turn this perception around, after 71% of brokers gave the same verdict in iwoca's Q4 2024 Expert Index .

iwoca also recently conducted an analysis of Government ministers' career histories, which revealed a lack of recent, hands-on SME experience among the Labour front-bench.

Just one in eight (12%) Government ministers in the House of Commons have worked for an SME in the last ten years, representing nine of 77 ministerial positions.

Against this backdrop of pessimism in the Government's ability to deliver for small firms, rising costs and a gloomy economic outlook are continuing to weigh heavily on small business owners . More than half (52%) of brokers say rising running costs remain small business owners' biggest concern.

Looking ahead, SME finance brokers predict a challenging economic environment will persist.

Over three-quarters (78%) expect inflation to be 3% or higher by the end of 2025 — missing the Bank of England's 2% target by a full percentage point.

43% of brokers say that SME owners are worried about the prospect of a recession, following recent figures from the Office for National Statistics showing that the UK economy shrank by 0.1% month-on-month in May