BDO’s Optimism Index, which indicates how firms expect their order books to develop in the coming six months, increased from 98.0 to 102.2 in December, above its long term trend, suggesting businesses are continuing to stay resilient following the referendum result, the declining value of sterling and volatility in the global economy.

The firm says this four-point increase in optimism was the sharpest observed since 2009 and indicates businesses are as confident as they were in September 2015. The rise is a result of a sharp improvement in both manufacturing and services sectors which gained momentum towards the close of 2016.

Employment levels are also healthy and have remained resilient through a turbulent 2016. BDO’s Employment Index, which reflects firms’ hiring intentions, continues to be above the long-term trend and currently sits at 101.1.

Peter Hemington, BDO partner, said: ‘British businesses are feeling pretty confident at the moment, helped by the impact of the currency depreciation on export competitiveness.  There's also a feeling out there that the world economy is picking up again as we go into 2017. 

‘Brexit may mean gloomy news in the press and, at times, chaos in government.  But our business community is getting on with it on the basis that opportunities for growth are there to be grabbed.’

However, separate research from Close Brothers Asset Finance suggests smaller companies are more sceptical. Its quarterly business barometer survey of over 900 SMEs found that 57% say that they do not feel confident about the UK’s economic outlook for 2017.

Firms at the smaller end of the scale – under £500,000 annual turnover – were the least confident, with 64% reporting a lack of confident in the UK’s prospects for the year.

Business owners in the north east and northwest of England were the most positive, with 56% and 54%, respectively, feeling positive about the year ahead, contrasting with the 36% of Scottish respondents.  

Neil Davies, CEO, Close Brothers Asset Finance, said: ‘Businesses owners are not taking a negative view, but they are being pragmatic about the UK’s economic prospects over the next 12 months. There are still many unknowns and this uncertainty is reflected in what small business owners are telling us.

‘For example, the value of Sterling is seen as a short-term issue and doesn’t create conditions for long-term investment. While activity in a number of sectors is stronger due to the weaker pound, helping to boost orders from overseas, cost pressures remain high with price increases being passed onto consumers, which may contribute to an increase in inflation down the road.’