The Business in Britain report from Lloyds Bank found that economic uncertainty was the most commonly identified threat for UK firms over the next six months, with 26% of respondents expressing their concern.

A further 17% of respondents believed that weaker UK demand in the wake of Brexit could pose the greatest threat to their business.

Despite this negativity, the report’s confidence index – an average of respondents’ expected sales, orders and profits over the next six months – did rise slightly to 14% from 12% in September’s survey.

Scotland and the South West both showed a particularly sharp rise in confidence, increasing 15% and 13% respectively.

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Meanwhile, confidence fell sharply in the West Midlands and Yorkshire, with each reporting a 16% and 15% drop respectively.

Tim Hinton, managing director of mid markets and SME banking at Lloyds Banking Group, said: “Business confidence definitely dipped a bit following the EU referendum result, but it has picked up again in the last few months, though still below the long-term average.

“Putting this in context, confidence remains well above the lows of the financial crisis, driven by demand both in the UK and abroad.

“We should expect more twists and turns in 2017, but in the meantime business owners are resilient and continuing to do what they do best – getting on with growing their businesses, while keeping an eye on the external risks.”