Finance chiefs have warned that Brexit uncertainty is impacting business decisions and expect conditions to deteriorate further once the UK leaves the EU.
A quarterly survey from accountancy giant Deloitte has shown that about 88% of chief financial officers (CFO) see business uncertainty as above normal to very high, while 65% expect the long-term business environment will be worse after Britain leaves the bloc.
That marks a slight improvement from the 92% who said uncertainty was above normal in the second quarter, but still marks the second highest reading since the end of 2012.
"Despite some improvement since the sharp, post-referendum deterioration, risk appetite and optimism remain close to previous lows and perceptions of uncertainty are elevated," Deloitte said.
CFOs rated Brexit as the biggest business concern, followed by weak demand in the UK, and concerns about poor productivity.
Other concerns included deflation and economic weakness across the euro area, the possibility of tighter monetary conditions, and the US presidential election.
When asked how Brexit would affect business decisions, 40% said that capital expenditure would drop, while 46% expect hiring to slow, and 55% forecast discretionary spending would drop.
The survey showed that risk appetite is still subdued.
Around 82% said that now was a bad time to take risk onto their balance sheet, marking the second highest reading since the end of 2011.
However, the proportion of UK finance chiefs that expect revenues to drop over the next year has fallen to 24%, down from 63% in the second quarter, while 44% forecast operating margins to decrease, from 70% in the previous reading.
Ian Stewart, chief economist at Deloitte, said: "The animal spirits of the corporate sector took a battering in the wake of the referendum and, three months on, Brexit continues to loom large for the UK corporate sector.
"Since our last survey we've seen the appointment of a new Prime Minister, a strong rally in equity markets and a solid run of UK economic data. But CFOs continue to see significant risks in the economic environment and perceptions of uncertainty remain elevated."