North-South divide in small business confidence, study says

Office worker at her computer screen Image copyright Oli Scarff
Image caption Small businesses in London and in sectors such as technology are more confident about prospects

A "clear divide" between north and south is being seen in the confidence felt by small UK firms, the Federation of Small Businesses (FSB) has said.

An FSB survey found confidence was lower in North East England, Yorkshire and Scotland than the rest of the UK.

It said those regions "risk being left behind" as jobs and productivity rise in the UK as a whole.

A picture of improving growth in the overall UK economy was given in a separate report by the EY Item Club.

The EY forecasters said GDP growth would rise to 2.6% this year from 2.2% in 2015, driven by higher consumer spending.

Business Minister Anna Soubry said the UK's small businesses were continuing to create jobs and benefitting from a growing economy.

However, the FSB suggested growth would be uneven, with businesses in the South and in sectors such as technology and professional services feeling more positive.

Flooding impact

The FSB's latest quarterly confidence index, measured in the final three months of 2015, stood at -11 points in the north east of England.

That was well below the total UK figure of +21.7 points, FSB said.

"The north east of England has had the most significant drop in confidence that we've seen for some time," FSB policy director Mike Cherry told the BBC.

He said business conditions were particularly difficult in the region, with unemployment nearly 60% higher than the national average.

The flooding during December was also likely to hurt confidence in the north west, despite a boost from the promise of devolution and investment through the government's Northern Powerhouse, Mr Cherry said.

Scotland, which had an FSB index score of 0, and Wales, on -1, also lagged the rest of the UK, while Yorkshire fell to +11.

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