Is it illegal for an ordinary member of the public to call himself in business Sir *** so so as if knighted?

Answer 1

No. We can, on the whole, call ourselves what we like, provided that we are not usurping the position of someone else by using their name or attempting to provide property or a financial advantage by deception. Most people would find a person who was not a knight pathetic for affecting the title of "Sir" rather than be impressed.
Are you sure that this person has not bought a Lordship of the Manor title? Another sad thing to do! http://www.faketitles.com/

Answer 2

I think you can call yourself anything you like in this country,So long as it is not with the intention of defrauding anyone.

Answer 3

Only if you intended to benefit from it financially, I think. That is illegal, so don't do it!