Growing numbers of UK businesses are planning staff reductions recruitment freezes over the coming months as they attempt to reign in their finances as the credit crunch continues to be felt.

According to a new study carried out by accountancy firm Baker Tilly, 45 per cent of medium-sized company finance directors were thinking of making staff reductions over April in comparison to 26 per cent in the previous month.

In addition, around two-thirds of companies within this sector have taken steps to reduce the risks to their businesses, including putting into place tougher credit controls to guard against their suppliers going bankrupt.

"The finance directors are getting gloomier," commented Laurence Longe, Baker Tilly national managing partner.

"The headlines day after day are beginning to affect the real economy."

At the same time, separate research conducted by Deloitte also found that half of finance directors of larger companies are planning on scaling back their recruitment plans, while 38 per cent are considering introducing job cuts so as to offset the losses caused by the general economic downturn.