The British Chambers of Commerce (BCC) has warned that UK small firms are ‘treading water’ on investment.

The BCC’s Quarterly Economic Survey found that there was no improvement in business conditions in the first quarter of 2024 as measured by sales, cashflow and investment. It showed that levels of business confidence remained unchanged – 56% of businesses expect an increase in turnover in the coming 12 months.

Firms also anticipate hiking their prices in response to volatile inflation. Meanwhile, economic headwinds ‘continue to impact heavily on business investment’, with ‘large sectoral disparities’ in investment levels.

David Bharier, Head of Research at the BCC, commented: ‘Although business confidence remains buoyant at the start of the year, most SMEs are still not reporting any tangible improvement to business conditions.

‘The lack of investment among most SMEs is a real concern. Inflation, skills shortages, and an almost endless list of new trade barriers with the EU, coupled with a lack of clear direction on infrastructure and technology investment at the government level, have led to paralysis for many businesses.’