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Company directors of small businesses are losing faith in the prospect of positive economic conditions, new statistics show.
Figures from the Bank of Scotlands latest index (the lower the score the higher the pessimism) indicate that small business owners faith in a positive economic climate stands at 42 - down from 48 in April.
Some 63 per cent of respondents believe the general economic situation will decline over the next 12 months - a 24 per cent increase on those who predicted the same during the third quarter of the year.
The findings also show that almost half of entrepreneurs are worried about the prospects for the UKs small business sector with only 25 per cent maintaining a positive outlook.
In addition, only a third of company directors believe that now is a good time to run a small firm compared to almost four in ten who think the opposite.
Analysts believe that the figures illustrate the effect of the recent credit crunch which is starting to have an impact on small firms.
Ivan Matviak, head of the Bank of Scotlands banking division, said: "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."
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