LONDON: The credit squeeze has dampened the confidence of Britain's business community, reports the Institute of Directors, whose latest survey reveals that only 4% of bosses are 'more optimistic' about their companies' prospects.

This compares with 24% of directors at beginning of August, according to the IoD's quarterly Business Opinion Survey. Moreover, 15% of those questioned said sales had been adversely affected by the worsening financial climate.

The proportion of directors who said their company was 'performing well', versus those who said it was 'performing badly', fell to 73% in the latest survey, down from 77% in August.

Comments IoD chief economist Graeme Leach: "Thankfully, actual business performance remains high. Across the whole economy there is a real divide between the actual impact of the financial crisis to date and expectations of what it might bring in the future.

"The key question now is whether optimism will bounce back because, if it doesn't, business investment could be hammered."

Data sourced from BBC Online; additional content by WARC staff