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LONDON (Reuters) - British business sentiment surged from a four-year low and hit its highest level since mid-2015 in February, a survey by Markit showed on Monday, marking a recovery in corporate optimism after last year's Brexit vote.
A net 52 percent of firms expected activity to grow in the next 12 months, the first time the reading has been above 50 since June 2015.
A reading of 39 percent in October was the lowest since 2012 and had marked the fourth straight fall in business confidence in the survey which is conducted three times a year.
Markit said the latest figures reflected greater optimism among manufacturers and service firms as Britain prepares to start negotiations on its departure from the European Union.
Although official data published on Friday showed manufacturing and industrial output slipped in January, on a three-month basis factory output had its strongest performance since mid-2010.
The signs of a recovery in manufacturing have come as Britain's consumers turn more cautious because of a rise in inflation caused in large part by the fall in sterling since last year's Brexit referendum.
Monday's Markit survey showed the balance of private sector firms expecting greater input prices over the next 12 months hit its highest level for six years.
Despite that, optimism over profits made firms the most upbeat about hiring expectations since late 2015.
Data for the survey was collected between Feb. 10-24 and polled around 12,000 manufacturers and service providers.
Reporting by Alistair Smout; Editing by William Schomberg