Let’s keep the champagne on ice…..for now.

The United Kingdom has struggled out of recession like the kid who twisted his ankle on the cross country run. While the other major economies of the world have all registered some sort of growth for the last six months, it took the UK a full quarter more of pain before we finally hobbled over the line.

The cheering spectators have long departed except for Mum and Dad (Brown and Darling) who gamely tell the limping lad that he did brilliantly and was in fact poised for great success in the future once his ankle mends.

But there it is. 0.1 per cent of growth that at any other time would be a disaster has now become a sign that we are really on the mend. We’re not so sure.

At Clifton we talk to hundreds of business owners every week. We survey over a thousand business owners ever quarter. Day in day out, we hear from these entrepreneurs and we know what they are telling us. On the ground it is still tough. By far and away the biggest problem for the SME sector in the UK is the availability of finance. Good profitable businesses are simply not able to access the working capital that they need, and if they are, at rates that remind us of the 1970s.

I talked to the owner of a small manufacturing company recently who was looking for some capital to take on some larger projects. “The answer has been the same for the past year from my bank,” he said. “Yes there are funds available but they now want security over my home as well. They never wanted that before. The wife is not happy with this. Nor am I.”

I wish I had a pound for every time I have heard this lament over the last two years.

And now the news that we are out of recession. Do we expect things to change soon? The Clifton Asset Management quarterly survey of business owners is pretty emphatic. Almost two-thirds of those surveyed were convinced that 2010 was going to remain as difficult as 2009 and most expected it to be well into 2011 before a really robust recovery took hold.

While the government is forced to help stimulate demand in the economy through initiatives such as the Enterprise Finance Guarantee, car scrappage and home boiler scrappage schemes, and the ballooning deficits point to a period of public sector austerity, it is difficult to see the UK bouncing back at anything other than a limp.

In this environment, bank lending is almost inevitably going to remain constrained. Relationship managers will have their work cut out convincing the business owners of the country to give them a charge over assets like their home.

So good news that the economy is not collapsing in a heap any more, but let’s not pop any champagne corks just yet.

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