A leading business organisation says the South East economy is at a "turning point" and faces a "harsh winter" unless there is more government support.

The comments come from the local branch of the Federation of Small Businesses (FSB) after it revealed the latest results of its Small Business Index (SBI) - which gauges confidence in the economy.

Findings for the third quarter of 2021 saw confidence fall by 15% over the previous three months.

But it says economic indicators suggest businesses in the region are improving, with 44% reporting increased revenue, compared to 28% in the first quarter. In addition, 34% are reporting less revenue decline, compared to 52% in quarter one.

However, pay rates continue to rise, with 56% of business respondents increasing salaries, 45% of whom awarded 2% or more.

The FSB says given this backdrop, it was disappointed in the Chancellor's recent Budget. It says while support on business rates for the hard-hit retail, leisure and hospitality sector was welcomed, additional support on VAT would have continued to "incentivise consumer demand". The SBI report shows 27% of respondents cite ‘consumer demand’ as a barrier to growth.

Additionally, nearly one in two businesses (46%) say finding skilled staff is holding back their progress.

Deborah Turner, South East policy chair for the FSB, said: “This report shows the South East economy at a turning point; wanting to press on and aspire to greater things but, without support, facing a harsh winter of inflationary cost increases and staff shortages.

"We need government support more than ever. We need full scale reform of business rates to fit with a 21st century digital economy. We need government to invest the additional tax take from growing wage rates into more job creation, such as raising the employment allowance for business.”

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