Investment in SME Sector Continues to Fall

While the media has been saturated with news of the government’s increasing support of the SME sector, – with Business Secretary Lord Mandleson announcing that they are the ‘backbone’ of the UK’s economy. It seems that the majority of business owners still do not feel enough is being done to help them survive the recession.

While the Government announced that their further investment into banks would result in an economic situation in which more finance would be available to fund company formation and business growth, according to a report published yesterday, that has not been the case.

According to the Office of National Statistics, investment back into existing businesses has fallen by 3% in the last quarter.

Economist John Cocker comments: “While many people may be shocked to hear that investment has fallen over the last three months, it will not come as a surprise for the many business owners who are seeking finance. They have no doubt been faced with a less positive situation than the media and government would like us to believe.”

“ The findings of the ONS report just highlights the fragility of the UK’s economic situation and while it hints that the future is not entirely bleak, that fact that investment rates have been consistently falling, not only suggests challenges ahead, but also that the recovery strategies the government have been implementing are not working”