Falling to a 67 reading in July, confidence soared 19% to hit 80 in August. However this remains a long way off the pre-Brexit level of 92 and the long-term average of 101.

Breaking the index down by regional scores, whereby a 50% score represents positive sentiment, confidence rose most significantly for the prospects for UK shares, with a 7.5% swing from 52.5% in July to 59.8% in August. However while the UK saw the biggest swing in positive sentiment, overall confidence remains highest for the prospects for US shares, with the August reading standing at 62.8% (up 0.8% from July).

Laith Khalaf, a senior analyst at Hargreaves Lansdown, notes while sentiment has improved there remains “a Brexit-shaped dent in confidence”.

“The sharp fall and subsequent recovery in confidence underlines how volatile sentiment has been in the last few months, and why it’s a particularly inappropriate time to be hanging too much significance on one or two data points,” he says.

Outside of the UK, investor confidence in European shares did show some improvement in August, although at 47.3% it remains modestly negative. After the US, confidence was highest in global emerging markets, while month-on-month there was a small decline in sentiment towards Japanese equities.

Khalaf says: “Investors remain most confident in the US stockmarket despite relatively high valuations, which is understandable seeing as economic growth and monetary policy appear to be going in different directions on either side of the Atlantic.

“The UK stockmarket is still trading near its long-term historical average, and looks attractive when compared with government bonds, some of which have traded at negative yields in recent days, offering investors the dubious privilege of actually paying for the privilege of lending money to the UK government.”