Business confidence in Scotland rose three points to 20 per cent in the first six months of the year in spite of uncertainty over Brexit, according to the latest Business in Britain report from Bank of Scotland.

In line with the increase in confidence – calculated as an average of respondents’ expected sales, orders and profits over the next six months – firms are increasing their investment and recruitment plans.

According to the report, the net balance of firms looking to grow investment in the next six months rose by 11 points to 13 per cent, compared with January.

Although the net balance of businesses looking to hire more staff rose by nine points to two per cent since the start of the year, the share of firms that reported difficulties hiring skilled labour also rose two points to 45 per cent.

Perhaps in response to this, the number expecting to increase pay rose by six points to 21 per cent.

The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, predominantly small to medium sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

Fraser Sime, regional director for Scotland at Bank of Scotland, said: “Businesses in Scotland have shown great resilience and have continued to adapt to these turbulent times.

“Despite firms starting to feel more confident as the landscape shows signs of levelling out, Brexit uncertainty is still at the forefront of minds across Scotland.

“We are however seeing businesses begin to take cautious steps towards growth, with plans to increase investment and recruit more staff.

“Now we need to continue to support those businesses to ensure they seize every opportunity being created by the current climate in order to grow and achieve success.”