At the same time the housing market showed signs of recovery, with sales on the up and construction firms receiving more orders as demand for homes rises.
The Telegraph reports that Businesses across the economy reported rising confidence in the final quarter of the year, making them more willing to hire and invest, according to a survey from the British Chambers of Commerce.
Its members are not as cheery as they were before the referendum, but much of the lost confidence of the summer has now been recovered.
“As we start 2017 businesses are continuing to trade through the uncertainty, and are looking to seize opportunities as they arise,” said Adam Marshall, director general of the BCC.
“Our findings suggest that business communities across the UK remain resilient, and many firms are expecting continued growth in the months ahead.”
However, price pressures are also rising which may dent their prospects.
Another study showed builders increased their output in December at the fastest pace since March – before the stamp duty hike on landlords, and before the EU referendum, which took the wind out of the market’s sails.
Orders for residential property were particularly strong last month, according to the purchasing managers’ index (PMI), a survey from IHS Markit.
The index rose to 54.2, up from 52.8 in November and moving further above the 50 mark that indicates growth in the industry.
Residential construction led the way, while an increase in civil engineering work also boosted the construction sector, although commercial construction expanded only marginally.
Overall new business volumes reached their highest level in 11 months, reversing the feared decline in the market after the Brexit vote.
That matches Bank of England figures that show another rise in mortgage lending in November.
A total of 67,505 home purchase mortgages were approved in the month, meaning that lending is up by 10pc on the low level of 61,359 in August, shortly after the referendum.
The market is still not back up to the high of 73,082 seen in January 2016, however, when buy-to-let investors were enthusiastically snapping up property to beat a hike in stamp duty that came into effect last April.
By value, those home purchase mortgages in November amounted to £12bn, up from £10.4bn in August but also down from £13.4bn in January.
More than one-third of the mortgage market is currently made up of existing homeowners remortgaging to get a better deal. These homeowners borrowed £7.4bn in November as interest rates are at historic lows.
Nonetheless, the number of house purchase loans is also increasing gradually – at £12bn, November’s loans to buyers were at the joint-highest level since March.
“With housing market activity off its recent lows and the economy currently resilient, house prices look likely to rise modestly in the near term,” said Howard Archer, chief European and UK economist at IHS Markit.
“However, the fact that the housing market is seemingly struggling for momentum reinforces our suspicion that it is likely to find life increasingly difficult as 2017 progresses. We believe the fundamentals for house buyers will progressively deteriorate during 2017 with consumers’ purchasing power weakening markedly and the labour market likely softening.
“Increasing economic uncertainty is also likely to weigh down on consumer confidence and willingness to engage in major transactions such as buying a house.”
Price pressures from rising inflation are also evident in the construction PMI numbers – the rise in overall input costs was the steepest in more than five years, the survey found, as the weak pound forced builders to pay more for imported materials.
