The majority of small companies have not reduced staffing levels this year, according to new research by The Open University Business School in association with Barclays Bank and ACCA.

The research has revealed that 62% of small businesses have not reduced employment levels this year and almost half of respondents, especially those employing more than five people, now aim to expand over the next three years.

34% of respondents have seen sales increases this year, compared to 49% who have experienced a decline.

"These second quarter results show the mood of UK small businesses as one of cautious optimism. The decline appears to have slowed and may be levelling out and points to small businesses having a very different experience of recession," said Professor Colin Gray, of the Open University Business School.