New research indicates that small firms will power the economy out of recession following the pandemic, thanks to the quick recovery of London firms and the UK-wide pay increases.

This research was conducted by Xero for its small business index, the results of which for last month showed a rise that is the highest it has been in over a year and a half. This saw the index reach 95 points, providing a clear indication that small firms are making rapid strides in bouncing back from the long pandemic, despite the fact that they suffered more than most during it.

Small firms in the capital boosted their staff by 2.5% during that period, which ranks among the top employment increases for small businesses in any part of the UK. There was also a 2.7% rise in average UK wages for small business employees, with these being the key factors that are expected to bring about recovery.

This is excellent news for the economy and for smaller firms following a rough couple of years. Many may now turn to accountants in Goole or whatever part of the country they are based in to help them consolidate their recovery.

Glen Foster from Xero told City AM that:

“It’s encouraging to see positive signs of small recovery, with wages and jobs moving in the right direction and beginning to reflect the resurgence of the economy.”

The signs in the index will be even more welcome, as the mix of price inflation and supply chain issues has threatened economic recovery recently.