Small firms are less confident about their business prospects now than three months ago, according to the Bank of Scotland's confidence index.

The survey revealed that 33% of small business owners said it was a good time to own a small company in the UK, compared to 38% who thought the opposite was the case.

The majority (60%) of small business owners questioned thought economic conditions would get worse in the year ahead - a 24% increase on last year - while just 7% thought the business climate would improve.

"We can expect recruitment to be measured and growth to be steady but slowing," said Ivan Matviak, head of the bank's business banking division, who added that increasing tax demands and red tape would add to the pressure small business owners already face.