The accountancy firm’s Optimism Index, which provides a snapshot of business sentiment in the country, rose by 5.54 points across August.
This increase represents the highest monthly rise since the beginning of the pandemic, with the index now sitting at 86.44, although this is still below the long-term average of 100.
The jump was also driven by an increase in BDO’s Services Index, which rose by 6.03 points in August, with the government’s Eat Out to Help Out scheme driving assistance for the hospitality sector.
“However, with so many factors at play, this optimism may be built on quicksand. The end of the Eat Out to Help Out and furlough support schemes, coupled with early signs of a second wave of infections, the reintroduction of lockdown restrictions and Brexit uncertainty, will pose significant challenges to businesses over the coming months.”