Latest figures from the firm’s international business report (IBR), a long-running global survey of 2,500 businesses in 36 economies, show that global business optimism reached an all time quarterly record of 51% in the second quarter of this year. This represents five consecutive quarters of increases in global optimism.

Confidence was highest in the US, at an all-time record of 81%, while the EU reported a two year high (50%), and China a near three year high at 48%. Revenue expectations also hit an all-time quarterly high of 56%, as did expectations around increased profitability (47%).

However, the report found UK business optimism remains subdued, currently standing at 22%. This compares with 40% in the same period one year ago, and 79% two years ago.

The firm says the drop in optimism among UK business leaders is the continuation of a two-year trend which began before the referendum on EU membership, with a steady decline through 2016 and into the current year. 

The outlook for UK company revenues has dropped to 49% from 61% two years ago and profits have also declined in step, from 57% to 43% currently.

In contrast the EU has seen optimism rise from 39% to 50% in the last quarter. Just a year ago it was 35%. Grant Thornton says the change of mood in Southern Europe has been even more dramatic with a rise from 23% in the last quarter to 45%. In the last quarter, revenue expectations rose 9 points to 56% across the EU.

Robert Hannah, chief operating officer at Grant Thornton UK, said: ‘It’s understandable that UK businesses will be feeling somewhat at odds with their international counterparts, given the continued uncertainty on Brexit negotiations, and wider political and economic instability over the past two years.

‘That being said, many dynamic organisations are continuing to explore opportunities in markets abroad, where British goods and services still carry significant potential – particularly at a time when the relative value of the pound remains subdued.’

Separate research from Deloitte, in its Q2 2017 CFO survey of 122 CFOs of FTSE 350 and other large private companies, also found optimism among UK businesses has fallen and concerns about the impact of Brexit have risen.

The results, based on responses immediately after the June general election, show 42% of CFOs say they are less optimistic about the prospects for their company then they were three months ago, up from 17% last quarter. Only 18% of CFOs say they are more optimistic, down from 31% in Q1.

There has also been an increase in CFOs who say that the level of uncertainty facing their business is high or very high, which now stands at 43%, up from 34% last quarter.

Looking across the corporate sector as a whole, 43% of CFOs say they expect hiring to decrease in the next 12 months, up from 28% in Q1, while 32% expect a slowdown in capital spending, up from 22%, and 55% expect discretionary spending to slow, up from 38%.

In addition, 72% of CFOs say the business environment will be worse when the UK leaves the EU, up from 60% in the previous quarter and the highest level since the referendum. Just 8% say the business environment will be better as a result.

David Sproul, senior partner and chief executive of Deloitte North West Europe, said: ‘Business sentiment is highly sensitive to political developments and surprises. The outcome of the general election, like the result of last June’s EU referendum, was hugely unexpected and has knocked optimism. A period without such large shocks, and with the negotiations with the EU gaining direction and momentum, should help bolster business sentiment.’

Grant Thornton’s International Business Report is here.

Deloitte’s CFO survey is here.