Uncertainty grips small firms as a third are now resigned to a hard Brexit

The SME Confidence Tracker from business funder Bibby Financial Services found that 35 per cent of small firms are resigned to hard Brexit and that only one in five, 20 per cent, expect Brexit to be achieved by March 2019.

Brexit is now accepted as a done deal with less than one in ten, 8 per cent, predicting that divorce from the EU will not go ahead.

While the vast majority, 71 per cent, of SMEs are clear that Brexit will happen, over half, 51 per cent, are anticipating a transitional phase before the UK can leave the European Union.

SMEs are agreed that Brexit will happen but what it looks like is still up for debate with the business community evenly split.

Over a third of SMEs, 36 per cent, are expecting a soft Brexit, while another third, 35 per cent, are preparing themselves for a hard Brexit.

Edward Winterton, UK CEO at Bibby Financial Services, said: “Uncertainty isn’t good for business and Brexit is uncertainty in its most acute form. One thing the SME community is certain about is we are leaving the EU. What is less clear is what Brexit will look like.

“Despite the Prime Minister’s speech in Florence, the country’s small business leaders are evenly split on whether the UK is pulling out of the EU fully, or whether there is still a possibility of remaining in the Customs Union and accessing the Single Market.

“Since the vote, we have seen a decline in business confidence and we are now starting to see foreign exchange fluctuations making it much more costly to import goods and services. Add to this declining domestic sales, and it reveals how tough it is in the current climate for the ‘backbone’ of Britain.”

Figures revealed that a quarter of SMEs say that an uncertain economic environment in the UK is holding back investment.