The Bank of Scotland’s business banking report revealed that business confidence has dipped by six points since April.

The survey found that only a third of small business owners believe it is currently a good time to be running a business in Britain, while 38% said it was a bad time.

Six out of 10 respondents expect general economic conditions to get worse during the next year, a 24% rise on the figure recorded in the third quarter of the year.

Ivan Matviak, head of Bank of Scotland business banking, said:

“The economic uncertainty that has dominated the news agenda throughout the latter half of 2007 has clearly filtered down to Britain's small business community.

“Whilst there are still some healthy growth expectations among a significant proportion of these owner managers, the vast majority are undoubtedly taking a more cautious approach when assessing both their own business prospects and the outlook for economic conditions over the coming year.”

Matviak said the findings suggested growth would be steady but slowing while recruitment would be ‘measured’ over the next few months.

He added: “Faced with a growing tax burden and an impenetrable maze of red tape, businesses will have to continue operating in a regulatory and fiscal environment that offers very little support or encouragement.”

© Crimson Business Ltd. 2007