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Cashflow continues to be a problem for businesses struggling to get through the recession and could be holding back growth.
The warning comes from the British Chambers of Commerce (BCC) which has said that there are many reasons to be optimistic and confidence is up but cashflow remains weak and that could undermine the prospects for the next quarter.
Balances measuring cashflow remain weak, and in negative territory for services. The manufacturing balance fell one point, to +1%, described by the BCC as "still a weak level" and the services cashflow balance rose four points, to -4%.
The latest BCC survey is more positive than the last, where those quizzed by the business group seemed top indicate they feared stagflation was coming, but there are calls for more to be done to free-up businesses and support growth.
"While the government has promised positive changes that will help businesses, improved transport infrastructure and deregulation for example, they are yet to become a reality. These medium- and long-term measures must be brought forward to help businesses grow and create jobs," said John Longworth, director general of the BCC.
"Access to finance is still a real problem for many firms, and more must be done to mean that this doesn't threaten recovery," he added.