SOME mergers and acquisition activity has been put on hold in Scotland following last week’s Brexit vote but accountancy giants have signalled confidence in the longer term prospects for the market.

David Leslie, head of deals Scotland for PwC, said the UK’s decision to leave the European Union had triggered a period of uncertainty in financial markets, which has had an immediate impact on activity in Scotland.

“We have already seen a number of deals be paused since the result last Friday,” said Mr Leslie, who warned that it could take some time for the impact of the Brexit vote on the market in Scotland to become clear.

“It is too early to see if these deals are merely delayed or cancelled,” he cautioned.

One of Scotland’s most experienced deal makers, Mr Leslie said the experience of past market shocks such as the financial crisis of 2008 suggested it could take as long as 18 months for confidence levels to recover.

He noted: “We think there is a high probability of a short term reduction in volumes in the deals market, but we expect the market will recover and continue to prosper in the long term. We do not believe that the market is permanently weakened."

The prediction is based partly on the fact that there is plenty of money available to support deals from banks and from private equity houses, who need to do deals to generate the returns they have told investors are achievable.

“Scotland has a large pool of quality companies with world leading intellectual property, technology and human capital. These businesses are - and will remain - strong and attractive irrespective of the underlying uncertainty. Additionally, the fall in sterling could be viewed as a positive for exporters and those looking to invest from outside the UK,” said Mr Leslie.

At the weekend EY said stock exchange flotation activity will slow to a “near standstill” in the next 12 months amid increased uncertainty about the outlook for the UK economy following the Brexit vote.

However, the firm predicted that bargain hunting private equity firms from home and overseas could look to buy more UK firms if the vote is followed by a sustained fall in the value of the pound and company valuations.

EY has set out to achieve significant growth in the corporate finance market in Scotland after recruiting a well known deal maker to lead its team in the country.

The firm said Ally Scott will become head of the EY Scotland’s Transaction Advisory Services practice in September after a long career during which he has held senior corporate banking positions at Barclays.

Mr Scott said: “I look forward to helping transform EY’s participation in the corporate finance market developing a leading, full-service team, with ambitions to grow significantly during the next three years, including an increase in the number of partners and directors.”

He added: “Scotland has a strong nucleus of growing and progressive organisations and as we navigate current economic uncertainties the right advice and strategic planning will be even more important for business than ever.”

Mr Scott has been head of Barclays’ corporate banking operations in Scotland and Northern Ireland since 2014.

He will be succeeded by Jamie Grant, who said Barclays is well positioned to capitalise on growth in the Scottish market.