Financial confidence was on the rise in the first three months of the year and, with it, business start-ups increased for the second quarter in a row.

But the number of new businesses in the Brighton and Hove area was less than the national average.

The number of new businesses started in the Brighton post code area last year was 3,900, nine for every 1,000 adults of working age.

The national average was 11 new businesses for every 1,000 adults, so Brighton has faired less well by comparison.

Between January and March, 95,300 new businesses started trading in the UK.

The figure was five per cent lower than the same period last year.

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

Continued growth in the economy and the fact a recession did not materialise might have helped keep business closures in check.

The number of businesses trading at the end of March was 2.71 million, only 4,000 fewer than at the end of the previous quarter.

The end of the quarter witnessed the smallest drop in the mainstream business stock since the end of September 2000, when the stock stood at 2.78 million.

The figures were compiled for the Barclays Small Business Survey.

Nigel Jeffrey, head of small business for Barclays in Brighton, said:

"For the first time since September 2000, we have tangible grounds for optimism for new business starts.

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

"I expect to see numbers continue to rise over the next three to six months, provided interest rates do not rise dramatically.

"The economic outlook is more positive and small business owners are clearly sharing that optimism."

Currently three per cent of the adult population of England and Wales say they are in the process of setting up a business.

The typical individual has a managerial or professional background, is three times more likely to be a man than a woman and twice as likely to have completed tertiary education.

Business start rates varied around the country last year, with the South-

West among the hot spots and the North having the fewest reported new businesses.

Younger firms appeared to have weathered last years economic storm better than their older counterparts.

This may be due to hesitation on the part of those considering starting a business, which left the competitive stage clearer for their contemporaries.

Stockmarket volatility has dampened some of the enthusiam for business launches and some owners had found the going too tough and had to close down their operations.

Business information group Dun and Bradstreet (D&B) said there had been an 18 per cent increase in the number of firms going out of business.

Small firms were more seriously affected by the economic slowdow.

Bankruptcies in small businesses were up by 20 per cent, compared to nine per cent in larger companies.

Martin Murphy, D&B risk management consultant for the south coast area, said it was more important than ever to keep an eye on customers and suppliers to minimise potential bad debt.