Many small companies in the East of England will struggle to survive past Christmas amid deepening concern about the economy, a business leader has warned.

Confidence among the region's small firms has plummeted as soaring costs eat into their bottom lines, new figures show.

A study by the Federation of Small Businesses (FSB) reveals that tough conditions have taken their toll in the third quarter of 2022, leading to a net confidence score of -33.

The figure represents a dramatic fall from the previous quarter, when it stood at -10.

FSB development manager for East Anglia Candy Richards warned that fears were growing among the small business community about the future.

“Small business owners are, by their very nature, optimistic and resilient," she said.

"But right now, the headwinds against them are gale-force and many will struggle to survive past Christmas.

"With inflation at a record high and consumer confidence having nose-dived as the cost-of-living crisis bites, small business owners are increasingly concerned about the months ahead.”

Despite the setbacks and economic uncertainty, the region has shown some resilience in revenue performance over the last quarter compared to other parts of England.

The survey revealed that 39% of small businesses across the East of England reported revenue rises, while 37% recorded a decrease - providing a net balance of 2%.

Other regions have seen significant falls in net revenue, according to the FSB. Its figures suggest the East Midlands now stands at -32%.

But down the line, 42% of businesses in the East of England anticipate falling revenues - slightly above the national figure of 41%.

Firms in the regions said their greatest perceived barriers to growth over the coming year are general domestic economic conditions (47%) and labour costs (40%). This was followed by consumer demand and a lack of appropriately skilled staff (both at 35%).

The FSB's East of England Policy Representative Richard Gapper said: "The region did show some resilience in revenue performance compared to other areas of England, with investment intentions standing at net 9% compared to the weaker UK average of 4%.

"There are signs that low business confidence is filtering through to employment levels, with a modest net change of -1%. However, looking forward the picture is more positive with nearly one in five business owners stating that they plan to increase headcount in Q4 2022."

Ms Richards added: "The survey reveals that the greatest perceived barriers to growth for small business across the East of England over the next year are general domestic economic conditions and labour costs, with the upwards pressure on salaries hitting cash-strapped small businesses particularly hard."