Watford businesses are preparing to "battle through" after figures confirmed Britain is still in a recession, despite hopes of an economic recovery.

Figures released by the Office of National Statistics last week showed an unexpected 0.4 per cent contraction of the UK economy between July and September.

This means businesses in and around Watford will still be feeling the pinch, particularly in the run up to Christmas.

The Watford Observer contacted several small businesses to asses their hopes and fears for the future.

Dattal Ali, manager of the Watford Cafe and Restaurant, in St Albans Road, said: "We have been very quiet in the last couple of weeks.

"I don't really know what to do, I need to pay bills and the staff. I'm expecting two more tough weeks at least before things might pick up."

At a time when Watford businesses would normally be capitalising on the build-up to Christmas, many are still struggling to attract customers.

But Craig Fabian, however, owner of the Nascott Arms pub in Stamford Road, is hopeful that traders can survive the months ahead.

He said: "I'm optimistic. Many businesses will have already adapted and found a way of trading through the recession.

"Not too many are down in the dumps. I suppose the strongest will survive and this can provide a big opportunity for businesses willing to take advantage.

"One thing keeping some businesses going is a loyal customer base. I'm lucky as I have a good amount of regular customers coming in over the weekend, but it's the mid-week business that is suffering."

The housing market has been badly affected by the economic slump and the latest financial figures will have provided little relief.

Stepup Estates, on Vicarage Road, have been forced to innovate in order to come through the economic difficulties.

Manager Zoran Kojic said: "We have effectively triple-marketed ourselves just to get our name out there."

"We have done our research and decided to compete on price, making ours some of the lowest in the area.

"These changes will hopefully allow us to expand throughout Watford."

Not every industry has been able to find success with new pricing strategies however.

Arvinda Joshi, co-owner of Pavillion restaurant, South Oxhey, said: "We have been offering deals such as two for meals for £9.99 but it's still been difficult to attract customers.

"The last two weeks have been particularly quiet. I assume it's down to people being very cautious with their money in the run-up to Halloween and Christmas."

Despite the difficult forecasts for Watford businesses, the resilient mood demonstrated across town was summed up by Miss Joshi.

"We will do our best, I'm still optimistic," she said.

Are you a small business owner? Can you see any light at the end of the recessional tunnel? Let us know by commenting below.