The Federation of Small Businesses (FSB) Small Business Index (SBI) stood at -2.5 in Q4 2017 after consecutive quarterly declines from the +20 recorded in Q1 2017.

One in seven (14%) small business owners reported they are planning to downsize, close or sell their business over the next three months.

Three quarters of firms (73%) reported a rise in operating costs from this time last year, with 40% citing higher labour costs, followed by utility (35%) and input costs (33%).

Two-fifths of small businesses (41%) reported a fall in profits, its level highest since 2013.

•   Slowing GDP growth could impact invoice finance demand
•   39% of brokers expect asset finance demand to increase in 2018
•   Pub and bar insolvencies rise 9%

The domestic economy was most frequently cited as a barrier for SMEs to achieve growth over the next 12 months, with more than half (55%) saying it will stifle their ambitions.

Consumer demand (34%), access to skilled staff (34%) and regulation (20%) were also reported as barriers to expansion.

Mike Cherry, national chairman of the FSB, said: “As we progress to stage II of Brexit talks, negotiations with the EU27 are set to continue dominating the political agenda.

“While the swift agreement of a transitional arrangement and an ambitious free trade agreement with the EU are absolutely critical, it’s spiralling costs, weak growth and flagging consumer demand at home that are front of mind for small firms day to day.

“It’s troubling to see a record number of entrepreneurs seeking an exit as these challenges prove too much for many.”