Business confidence is diminishing as the squeeze on SME finance continues to tighten, according to a report by the Federation of Small Businesses (FSB).

The survey indicated that 40% of small businesses had previously been refused credit, while more businesses were found to be firing rather than hiring for the 10th consecutive quarter in a row.

Confidence also fell in almost every sector bar health and motor services. The most marked declines occurred in the property market and the financial services - key elements of the London economy.

Despite the unfavourable outlook, more than half of all FSB members expressed plans to grow their company over next year. However, 20% said that a lack of access to finance was their main obstacle to growth.

Commenting on the findings, FSB chairman John Walker said:  "We know from past research that many small businesses missed growth opportunities because they couldn’t access the money they needed.


The FSB is now calling on the chancellor to cancel a 3p hike in fuel duty during August, as most businesses cited fuel bills as a major factor in rising costs.