The firm's International Business Report recorded a 19% drop in net business optimism in the UK in the third quarter compared with the previous quarter. Confidence was down to 21%, which marked a 46% drop from the same period last year.

Grant Thornton said the drop in overall UK business confidence was mirrored by falls in companies’ expectations for the year ahead in a number of key areas including selling price expectations, employment, profitability, and investment in new buildings, plants and machinery and research and development.

Export expectations, however, did show a net increase of 10% possibly reflecting the relative devaluation of sterling against other major currencies following the outcome of the referendum.

The research polled businesses in 36 economies over the past two months. It also identified a loss of confidence across the EU, with optimism dropping by seven percentage points in the quarter. Ireland recorded one of the biggest falls, down by 24%, with France (down 18%) and Spain (down by 19%) amongst some of the trading bloc's biggest drops.

Robert Hannah, chief operating officer at Grant Thornton UK, said: ‘The UK's historic vote to leave the European Union and the number of unknowns this creates from an economic and regulatory perspective has rattled business confidence – both in the UK and amongst some of our closest trading partners on the continent.

‘Whilst the UK's drop in confidence in the third quarter remains one of the most significant amongst countries surveyed, business optimism has been steadily trending downward in the UK over the past two years, from a high of 82% in Q3 2014.’

The survey findings also reveal that more than a fifth (22%) of UK businesses and nearly a third (30%) of Irish businesses indicated they had put key decisions on hold as a result of the Brexit vote.

When asked what areas the government should prioritise to support their businesses' growth, UK respondents pointed to full access to the single market, cited by 48%; continued free movement of people across Europe (46%); a review of UK employment legislation based on EU rules (45%); and trade deals outside the single market (34%).

Separate research from Moore Stephens suggests uncertainty over Brexit has dented investor confidence. It has identified an 18.6% fall in the net amount of money raised by UK businesses through share and bonds issuance over the last year. The total was £18.4bn, down from £22.6bn the year before, and marks the first decrease in the net issuance of capital raised by UK businesses in the last five years.

Phil Cowan, partner and head of corporate finance at Moore Stephens, said: ‘The stalling in the UK’s IPO market is a worry in itself but having that accompanied by a sharp fall in bond issuance adds to concerns over the impact of Brexit on the UK’s capital markets.

‘The number of new listings in London so far this year has roughly halved compared with the same period in 2015.’