Financial confidence has been on the rise in the first three months of 2002, and with it business start-ups are on the increase for the second quarter in a row, according to research published by Barclays.

The Barclays Small Business Survey for Quarter One 2002 found that in the first three months of this year:

n 95,300 new businesses started trading. Although this figure is five per cent lower than this time last year, it's the second consecutive quarter to register growth.

n Business closures were down year on year, with eight per cent fewer businesses (99,700) closing than in the first quarter of 2001.

n Continued growth in the economy and the fact that a recession did not materialise may have helped keep the number of mainstream business closures in check.

n The number of businesses trading at the end of March 2002 stood at 2.71 million, only 4,000 fewer than at the end of the previous quarter. Q1 2002 saw the smallest drop in the mainstream business stock since the end of September 2000 when the stock stood at 2.785 million.

Jane Williams, head of small business at Barclays in Swindon, said: "For the first time since September 2000, we have tangible grounds for optimism for new business starts when looking at the number of mainstream businesses.

"Britain is a nation of entrepreneurs and it seems that the economic slowdown may have delayed but not deterred people putting their plans into action.

"I expect to see numbers rise during the remainder of the year, provided interest rates do not rise dramatically. The economic outlook is more positive and small business owners are clearly sharing that optimism."