Confidence has fallen among small businesses in Scotland, which are already less confident than those south of the border, according to a new survey.

The latest quarterly report from the Federation of Small Businesses (FSB) identified a drop in business confidence north of the border, but noted that most firms still intend to recruit and invest.

A net balance of +6% of businesses surveyed reported an increase in revenue over the past three months, down from +17% over the same period last year.

Meanwhile, the number of firms experiencing a rise in profits fell for the first time in five quarters.

There were also significant falls in confidence in Wales, London and the South West, with confidence remaining strongest in the Midlands and the East of England.

Andy Willox, the FSB’s Scottish policy convener, said: “With revenues and profits taking a hit, it’s little wonder that confidence has dropped.

“Even in these choppy waters, though, it’s good to see small businesses continuing to do their bit by creating new jobs and investing for the long term. And the improving credit market will make it easier to turn firms’ plans into reality.

“Overall, these figures serve as a timely reminder that a sustained recovery is far from guaranteed. We need to make sure that the small businesses on whom resilient local economies are founded get paid for the work they do, get a fair deal from regulators, and can easily hire the right staff with the right skills.”