The balance of firms feeling more, rather than less, confident about the UK economy fell by just one per cent between December and January.

Attitudes varied across different sectors however. While more businesses in the industrial and distribution sectors expected business activity to fall, rather than rise, over the next 12 months, the service sector reported an upturn. Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: “It's surprising that, overall, firms weren't even more pessimistic, given the depth of concern about falling house prices and the potential knock-on effect on consumer spending. “This suggests there may be pockets of continuing economic growth, which means the assertions of an impending recession are way off mark and continued, albeit slower, growth is more likely.”