BUSINESS confidence remains stuck in negative territory in Scotland as political uncertainty continues to weigh heavily on sentiment, despite showing signs of recovery in October.

The Bank of Scotland Business Barometer, which compares the percentage of firms positive in their outlook for the economy with those which are negative, rose last month. But the score remained negative at -3% - the lowest reading in the UK.

However, firms’ confidence in their own prospects was measured at 2%, compared with -5% in September. A net balance of 4% of businesses said they expect to increase staffing levels over the next year, up 11 points.

Across the UK, overall confidence rose four points to 6%, the report found, as firms’ confidence in their own prospects climbed two points to 15%.

The report, which canvasses the views of 1,200 businesses each month, was carried out before the UK Government announced its new Brexit deal. That legislation has been paused after the EU agreed to a Brexit extension, with a General Election subsequently called. A net balance of 24% of businesses in Scotland said Brexit was having a negative impact on their expectations for activity, down eight points on the month before.

Fraser Sime at Bank of Scotland said: “It is encouraging to see that an increase in firms’ confidence in their own business prospects has underpinned a rise in overall Scottish business confidence this month, but it’s clear the uncertainty that’s gripped the UK for so long is still having an impact. Yet, with more firms telling us they intend to bring on new staff during the next year, we are optimistic growth will remain on the agenda.”