The UK economy and small companies

A gap has emerged between the growth of small and large companies. A survey has shown that companies with less than 50 employees have reported less growth in profits than those with more than 250 employees. Small businesses are suffering from reduced margins, as many companies are still overall generating revenue growth.

Furthermore, the rate of recovery of small businesses has reduced over the past quarter and sales fell and job reductions increased in this sector over the period. The exception is small manufacturing companies which largely have increased their sales over the quarter.

Although banks have promised £190 billion to small firms, they have been accused of choking Britain’s economic recovery by not lending or charging high rates of interest. The gap between rates of interest charged to smaller companies and larger firms has risen to record levels.

This gap is being widely publicised and the feeling is that banks have pulled the wool over eyes of the government, so perhaps pressure may be applied to them to aid economic recovery