Small firms gain confidence, but remain pessimistic The Federation of Small Businesses has warned that SMEs across Britain believe that the cost of living squeeze is holding back economic growth, after two in five company bosses reported a drop in sales at the start of the year. The FSB said that although business confidence was rising among bosses before the summer, soaring costs and weakness in consumer demand were still weighing on activity. According to the latest snapshot from its small business index, 92% of companies said costs were higher in the first quarter compared with the same period last year. Martin McTague, the FSB’s national chair, said: “The prospect of further interest rate rises is causing significant disquiet, at the same time that costs remain at serious highs.” Many motorsport SME's report bouyant trading.