The UK’s smallest businesses have recovered in confidence following a volatile 2016, according to the Association of Independent Professionals and the Self Employed (IPSE) and freelance website Upwork. However, freelancers’ faith in their businesses was not matched by confidence in the wider UK economy, which hit a record low.

The survey of 1,158 freelancers found that freelancer confidence was underpinned by an uptick in daily rate of pay, rising to £419 in Q4 2016, up from £403 in the previous quarter. In addition to higher earnings, freelancers are also working more, spending 80 per cent of their time actively working on projects compared to 74 per cent in the previous quarter. When asked about Brexit, almost half (47%) of those surveyed expect it to create problems for their business in the next year, while Government policy was cited as the single biggest constraint on business performance. The survey took place shortly after the Autumn Statement which introduced strict new rules for freelancers seeking contracts in the public sector. Building a brand reputation and increasing innovation were seen as key positive drivers of business performance by freelancers.

Commenting on the survey results, Chris Bryce, IPSE CEO, said: “It’s good to see that even if freelancers remain uncertain about the economy, they have faith that they can make a success of their business. This illustrates the resilience of the freelance workforce who can thrive, even when the economic picture is tough.” Rich Pearson, SVP of International at Upwork, said: “One of the major benefits of being a freelancer is having a diversified portfolio of clients, which is oftentimes more secure than having one employer. Digital platforms like Upwork are enabling freelance professionals to access millions of clients around the world and therefore build confidence in their futures – regardless of how Brexit or other uncertain situations unfold.”

Professor Andrew Burke, Dean of Trinity Business School, Trinity College Dublin, and co-author of the report, said: “Freelancers feel that they have weathered the worst of the immediate negative impact of the EU referendum result. Their quarterly earnings have recovered and are now back to the levels achieved in the same quarter of last year. However, they don’t have the same confidence in the UK economy and expect economic performance to deteriorate significantly in 2017. Despite the expectation of this adverse economic climate, freelancers expect to be able to take control of their own destinies through innovation and growth strategies in order to outperform the UK economy over the next year.”