Forecasts of business confidence among the UK’s SMEs have hit a record high, according to new study launched by leading bank group.

The annual Business Growth Survey, conducted by Santander Corporate & Commercial group, has found that businesses with an annual turnover of up to £20 million are predicting turnover growth of 33 per cent a year on average – a record high since the survey began three years ago.

The study also found that a fifth of business owners felt their company had never been in better shape – nearly twice as many who said the same in 2013 (13 per cent).

The research also indicated a positive outlook for employment, with 30 per cent of companies stating that retaining existing staff was an ‘immediate priority’, ranking as the second most important issue after ensuring the survival of their business (57 per cent).

The majority of firms also felt that acquisitions were important to growth, with 17 per cent of firms now naming this as a priority for their business.

Marcelino Castrillo, managing director of SME Banking at Santander, said that it is “extremely encouraging” that business confidence in the UK is at its highest level for three years.

“The outlook for staff retention and new job creation is also positive, which is welcome news for the wider UK economy,” he added.

Despite greater confidence in the sector, business owners still reported facing challenges.

Access to capital has always been a challenge for small firms and a quarter said they were still struggling to find the right investment for them.

For the majority though a tough business environment was still seen as the biggest challenge to growth (47 per cent).

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Smailes Goldie Group

Smailes Goldie Group

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