UK small business owners and decision-makers will be adopting a cautious approach to capital expenditure, hiring and business growth, according to Bibby Financial Services’ latest SME Confidence Tracker.

Over a 1000 firms UK SME’s took part in the survey, with an average turnover of £1.2m (€1.63m).

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The survey found that less than half (46%) of SMEs expect their business to grow, down from 64% in Q1 2014, when the survey began. In addition, the proportion of businesses expecting a decline in their sales was greater than at any point seen previously in the SME Confidence Tracker.

David Postings, global chief executive of Bibby Financial Services, said: "UK SMEs are sensing dark clouds on the economic horizon, which is translating into dampened expectations for growth in the final months of 2015."

According to the survey, just under half (46%) of small business owners and decision-makers said that they are not planning to invest in their business, while a similar proportion (57%) answered that they do not plan to hire new staff over the next three months.

One in five (21%) said the uncertain economic environment in the UK was their primary reason for holding off on future investment.

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BFS said that small businesses that are planning to invest appear to be focused on the general upkeep and maintenance of their business.

"Their primary reasons for investment are keeping ahead of the competition and replacing machinery and equipment that had deteriorated, indicating a ‘business as usual’ approach to capex, rather than funding growth," wrote BFS.

Postings said: "It seems that even our smallest businesses are taking fright in response to gloomy indications from both the Bank of England and the IMF.

"With the distinct possibility of another recession in 2016, small businesses need support and stability. The urgent appointment of the Small Business Commissioner to tackle the issue of late payment would significantly help our small business owners to weather the storm."