The UK business outlook for the next half-year has slumped following a number of economic setbacks, a survey showed on Thursday.
A straw poll of 1,800 British firms found that a balance of 18 per cent was expecting improved orders, sales and profits.
At the time of the last survey in July, taken before the collapse of the US subprime lending market and the Northern Rock affair, the balance stood at 41 per cent.
But Lloyds TSB Commercial, which conducted the research, said its data was "far from indicating a recession".
Its managing director John Maltby insisted: "There's no doubt 2008 will prove more of a challenge for many firms, but it's a ride most will be able to endure."
Mr Maltby's comments come despite the survey showing a 15-point fall in the proportion of firms reporting higher sales over the last six months to 26 per cent.
In addition, the balance of companies with higher order books than this time six months ago dropped by 14 points to 19 per cent the worst slump for ten years.
But the number of businesses which admitted they had cash problems remained consistent across the two surveys at one fifth.
Mr Maltby added: "It's clear that investment spending will be capped, as businesses tighten their financial belts, but British firms are well versed in the art of cash management and financial planning and these are skills that should help them weather the storm throughout 2008 and beyond."