IRISH and British business leaders fear political instability more than any other threat, according to a new report.

Almost a third of Irish and UK business leaders are worried about political instability while under a quarter worry about the end of the Federal Reserve’s quantitative easing programme. A fifth are concerned about slow growth in emerging markets.

Confidence in the Eurozone is high, with less than one in five of those surveyed citing the pace of structural reforms in the Eurozone as a key risk.

Irish business leaders are more confident about the future than at any time since the bust and are more confident that their British counterparts, a new report shows.

Just under two-thirds of Irish and UK executives surveyed believe that the economy is resilient, EY said in a new survey of business sentiment. Confidence in Ireland is higher than the UK thanks to improvement in the Irish economy. But confidence in credit availability is markedly lower in Ireland.

“Business leaders in Ireland have a greater level of confidence in the local economy than their counterparts in the UK, which is a significant turnaround from where we were even a few years ago,” said EY executive Adrian Browne.

More than half of executives expect deal volumes to improve in the next 12 months.

Irish companies, in particular, were optimistic about organic and inorganic investment. However, the lessons of the financial crisis are very much to the fore, with 36pc citing cost reduction as a major issue.

Graham Reid, lead of EY corporate finance in Ireland says companies are risk-averse. “Companies have been rewarded for doing the right things during the recession and now this is engrained,” he added.

The report reveals the top five investment destinations for Irish and UK corporates are China, the US, Singapore, UAE and Indonesia.