Small businesses are urging the new Labour government to make it easier to hire and grow as they suffer from a third consecutive quarter of slowing sales.
Higher energy prices and continued economic uncertainty due to the Middle East conflict are piling pressure on small firms already suffering from a slowdown in sales.
Sales across small businesses rose by just 3.6 per cent year-on-year in the three months to June, slowing from 4.2 per cent in the previous quarter and 5.5 per cent in the final three months of 2025.
It represents a significant drop from the historic average of 8.5 per cent sales growth.
The aggregated data from 440,000 customers of business software firm Xero reveal that the pressure on small firms shows no sign of letting up, which is having a knock-on effect on hiring and investment.
