Small business confidence increased by 43 points to -2.8 in the first quarter of 2023, according to a new survey from the Federation of Small Businesses (FSB).

The FSB's small business index shows confidence improving across all major sectors, including wholesale and retail, accommodation and food, and the professional, scientific and technical industry.

Despite the rise in small business confidence, the FSB says there are still some "dark clouds" hanging over SMEs.

Soaring inflation remained a top concern for smaller businesses, with a record 92% of respondents reporting that their costs were higher in comparison to the same quarter last year.

Falling sales were also an issue for many SMEs. While a third of businesses (34%) reported an increase in sales for early 2023, 41% said their revenues fell.

However, the outlook for the next quarter was more positive, with 39% of small businesses expecting to see their sales rise in the coming months.

Martin McTague, national chair of the FSB, said:

"Our latest small business index data shows that small firms may be about to turn the corner and rebound after the pandemic and the energy crisis.

"However, the prospect of further interest rate rises is causing significant disquiet, at the same time that costs remain at serious highs."

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