Small firms are bracing for mass closures and contraction, a survey has shown.

A record number of small businesses are expecting to shrink or close down in the next year, a leading industry group has warned, amid a “vicious” cycle of low growth and fears that next month’s Budget could cause more pain for businesses.

Nearly one in three of the UK’s small businesses (30 per cent) expect to cut operations, sell up or collapse in the next 12 months, according to the Federation of Small Business (FSB).

Owners said the November Budget came at a “make-or-break” moment for small firms as net confidence dropped to -58 in the third quarter of the year, lower than the previous -44 figure and the second lowest reading since the start of the pandemic.

Industry officials also said the portion of

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