Confidence among small business owners in the South West has fallen further according to the latest quarterly update from the Federation of Small Businesses.

The national survey, which was carried out at the end of December before the latest lockdown restrictions started, revealed the only lower confidence figures in the 10-year history of the report came during the first lockdown.

Around five per cent of firms questioned across the UK expect to close this year - 250,000 small businesses if the rate is reflected throughout 2021.

More than half of those surveyed in the South West said they had seen profits decrease in the final quarter of 2020 with more expecting them to fall in the coming three months.

And nearly one in four South West small businesses said they had reduced their workforce since October.

Small business confidence in the South West was higher than the national average and 10 per cent of the region's firms had increased their workforce.

But the report paints a negative picture and the FSB's South West regional chairman Lee Nathan - said the results were understandable considering the pressures facing small businesses.

He said: "Once again these figures reflect how difficult it is out there for small businesses and they are a stark reminder about why it is so important that the Government continue to find new and innovative ways to help SMEs.

"It is small businesses who will be part of the solution for economic recovery but they can only do it if they get that extra support now.

"Helping small businesses is not a giveaway - it is an investment in the future."

National chairman Mike Cherry said it was time for the Government to act quickly to help restore ailing confidence.

He said: "The development of business support measures has not kept pace with intensifying restrictions. As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods.

"At the outset of the first national lockdown, the UK Government was bold. The support mechanisms put in place weren't perfect, but they were an exceptionally good starting point.

"That's why it's so disappointing that it met the second lockdown with a whimper. This Government can stem losses and protect the businesses of the future - but only if it acts now."