BUSINESS confidence in Scotland has dropped to its lowest level in two years, according to a survey.

The ICAEW/Grant Thornton UK Business Confidence Monitor found Scottish firms returned a score of +3.6 for the first part of this year, which was down from the +22 score recorded in the fourth quarter of 2014.

The latest score was also significantly lower than the +16.8 seen across the UK as a whole.

Grant Thornton's Scotland managing partner Kevin Engel said: "Given the impact lower oil prices, UK elections, weak European economic growth and overseas political unrest, it is not surprising confidence has dropped.

"While such a significant drop in confidence is naturally concerning, there are reasons to be optimistic. Our research shows that despite low confidence levels in the past, the Scottish business community is resilient, innovative and in good shape to face these challenges.

"Scottish business output continues to grow, as does long term employment and remuneration. Whether low confidence translates to a drop in economic performance is yet to be seen."