Investment into the UK economy from small businesses has hit a two-year low as they struggle to hire talent and raise productivity, figures have revealed.
Research from the Federation of Small Businesses found 72 per cent of small firms will not increase their capital investment over the coming quarter.
More than a third (35 per cent) of small firms are also finding it difficult to recruit skilled staff to boost these prospects.
The FSB national chair Mike Cherry says Brexit delays are fuelling the problems and Conservative leader hopefuls Boris Johnson and Jeremy Hunt should map out a better path to encourage investment.
He says: “We urgently need to see both prime ministerial candidates spell out their plans for supporting small firms and securing a pro-business Brexit – one that encompasses a comprehensive deal and a substantial transition period.
“Fast and loose talk about accepting a chaotic no-deal Brexit in four months’ time is not helpful. It’s impossible for small business owners to invest for the future if they don’t know what the future holds.”
Ongoing political uncertainty is leaving small businesses unable to innovate and reach their goals, he adds.
The FSB also found only 14 per cent of small firms are currently applying for new credit, while 43 per cent describe new credit as “unaffordable.”