More UK business news

The UK's small businesses are set for a "bumpy ride" over the next year according to one of the UK's prominent financial services providers. Over 4,450 UK business proprietors and directors were polled recently for Bibby Financial Services (Business Factors Index).

The survey found that 27% of small and medium-sized businesses (SME's) are barely able to maintain operations. The survey also found that 59% of companies are planning to cut costs, and half say that are going to work more closely with suppliers to prepare for further economic challenges ahead. 

As trading conditions deteriorate, more and more businesses seem set to adopt this stance. The survey also showed that 24% of respondents said that they were poorer than 12 months ago. More worryingly, over a third (35%) predicted that the UK economy will not recover for at least three years.  

However the impact of the euro-zone banking/finance crisis in the second quarter of 2011 on business activity and confidence has yet to impact on turnover levels, with the Index reading slipping slightly to 96.7, from 96.8 in the previous 3 months – this seems to indicate that Britain’s SME's are mostly stagnant.

Obstacles to growth include almost a quarter of business leaders stated that the most significant move to boost economic recovery would be a relaxing of bank lending criteria. Yet, more than 75% of the businesses polled had not applied for any external funding in the last year. 

Edward Rimmer is UK chief executive of Bibby Financial Services. He is quoted as saying: "With murmurs of an impending second 'credit crunch' rife, UK businesses are still in for a bumpy ride…and…there is a danger of negative growth turning into a backwards slide towards recession". 

He also said: "However despite the perceived 'doom and gloom' our second quarter research shows 39% of businesses across the UK are hopeful for the future. Our regional breakdown shows levels of optimism rising as high as 70% in East Anglia and around the 50% point for many areas."