BUSINESS confidence among Yorkshire firms has rallied, according to a report today.

The latest Business Trends report by business adviser BDO, said there was cause for cautious optimism after both its output and optimism indicators rose for the second month running in October.

BDO’s optimism index, which predicts business performance two quarters ahead, rose to 93.2 in October from 92.5 in September and follows a record low of 89.1 seen in August.

Echoing this, BDO’s output index, which predicts short-run turnover expectations, increased to 92.1 in October from 91.2 in September, the strongest reading since July 2012.

BDO said the threat of Eurozone flare-ups and weak, if improving, global growth meant that businesses faced an uncertain outlook for the remainder of 2012 and into early 2013.

Ian Beaumont, partner and head of BDO in Yorkshire, said: “Manufacturers in particular are fearful for the future. We hope the Chancellor’s Autumn Statement will set out concrete plans for a UK Business Bank to add to the government’s other growth initiatives.”