Small businesses are more confident than ever before, according to the Federation of Small Businesses (FSB), despite worrying signs of a yawning skills gap in the workplace.

Results from a survey of 2,500 small businesses by the FSB shows that businesses across the UK are growing in confidence, with professional services and technology showing the strongest sense of optimism.

FSB’s Small Business Index, which tracks confidence in the sector, hit 39.7 in June, up from 35.7 in the first quarter of 2014. It also revealed that one in four firms expect to increase capital investment over the next 12 months.

But, more worryingly, three in 10 businesses said a shortage of skilled workers would be a brake on growth, up from 25 per cent just three months ago.

John Allan, national chairman of the FSB, said: "Despite the emergence of a skills shortage, these results show small firms are still feeling very confident, with every intention to invest and grow. This will provide further momentum to the recovery, especially in terms of jobs growth."