As interest rates rise and energy costs soar, the Federation of Small Businesses (FSB) is urging for measures to alleviate the financial strain on small enterprises.

The FSB is specifically calling on energy suppliers to offer “blend and extend” contracts, enabling businesses to take advantage of lower wholesale prices.

The recent increase in interest rates by 0.5 points to 5% has raised concerns about a potential economic slowdown and its impact on the small business community.

FSB National Chair, Martin McTague, has highlighted the need for a delicate balance to be struck, providing small businesses with room to grow.

McTague said: “To help consumers and businesses, the government could raise the VAT threshold from £85,000 to £100,000. This move could cushion some of the hardest blows of inflation, preventing tax increases from exacerbating the impact of price hikes on businesses and in turn, their customers.

“Meanwhile, energy suppliers should allow firms to ‘blend and extend’ their contracts so they can take advantage of lower wholesale prices. Late payments should also be a top priority, as unpaid invoices can stifle growth and stability.”