The Federation of Small Businesses (FSB) Small Business Index leapt to 20.0 in the first three month of the year, the highest figure since Q4 2015 and a boom compared to the minus 2.9 reading in the aftermath of last year’s Brexit vote.

Exporters drove the increase on the back of strong international trade. A balance of 15.6% of firms said overseas sales had increased in the last three months. Almost a third said sales would rise in the next quarter.

Both figures hit their highest levels since the Small Business index began, said the FSB.

The group’s national chairman, Mike Cherry, called the news “encouraging” and called on ministers to negotiate a favourable trade deal as the UK prepares to leave the EU within two years.

“It’s hugely encouraging to see our small businesses trading more overseas, driving an exports-led recovery,” he said.

“We know small firms that export have higher turnovers than those who rely on the domestic market, so it’s crucial that the Government maximises cross-border trade opportunities for small firms.”

“That includes negotiating an ambitious free trade agreement with the EU as part of the Brexit process. The deal must include a dedicated small business chapter and ensure the easiest possible access to the single market.”

Separate research by the FSB shows that more than a quarter of exporters would be deterred from trading with EU nations if tariffs were slapped on exports.

“We cannot rely in the long-term on the boost that exporters have received from a weak pound,” said Cherry. “To maintain export growth, we need to focus on opening up new international markets and getting more small firms exporting.”

The renewed bullishness among owner-managers comes despite massive increases in the cost of raw materials and other input costs. Almost two-thirds of respondents said operating expenses had increased in the last three months.