BUSINESSES in the Liverpool city region are facing a triple whammy of bank refinancing, the VAT rise and public sector cuts in 2011, experts warned this week.

Merseyside business leaders have told LDP Business these three factors will hamper the recovery of many firms as they attempt to put the recent recession behind them.

Yesterday, a survey by the Federation of Small Businesses (FSB), revealed that 70% of small firms expect the VAT rise – from 17.5% to 20% – to have a negative impact on their business. The FSB Voice of Small Business panel survey shows a further 52% expect to increase prices, 45% expect a fall in turnover, and 36% expect a loss of customers as a result.

The FSB is urging the Chancellor to review the increase once the deficit has been significantly reduced.

John Allan, regional chairman, Merseyside, West Cheshire & Wigan Federation of Small Businesses, said:

“Small businesses have had a tough time in 2010, especially towards the end of the year, when what should have been a very busy.

“If the Government truly believes that the private sector is going to strengthen the recovery we need to see action.