UK businesses have "woken up" to the prospect of a no-deal Brexit, with confidence across the services sector falling, new analysis suggests.

According to figures published by the accountancy and business advisory firm BDO, optimism in the services industry dropped sharply in August to levels not seen since 2013.

In a report by the firm, BDO's Services Optimism Index fell 3.89 points in August to 95.49 - only just above the 95 level that indicates recessionary conditions.

The firm outlined that the drop in confidence dragged the overall optimism index down by 3.21 points across the month.

Martin Gill, lead partner at BDO in Scotland, said the drop was reminiscent of the aftermath of the 2010 general election, in which the Conservatives and Liberal Democrats went on to form a coalition government.

"This month's dramatic fall in confidence is a very worrying event," he said.

"Pessimistic companies don't invest or hire, which is how recessions start.

"The reason for this has to be that UK businesses have suddenly woken up to the fact that a no-deal Brexit is a real possibility.

"This reminds me very much of the aftermath of the 2010 UK election, when there was a sudden realisation that austerity wasn't going to be pretty.

"Sentiment collapsed as a result, and this was the precursor to a long period of very low growth that followed.

"Let's hope that we can avoid a no-deal Brexit, otherwise the next couple of years could be very uncomfortable."

Meanwhile, the Royal Bank of Scotland has suggested that political uncertainty is continuing to weigh down business confidence.

According to analysis by the bank, the private sector economy in Scotland remained close to stagnation in August, growing only fractionally for the second month in a row.

Order book volumes also slipped into decline, while the fall in workforce numbers accelerated from July.

The bank also indicated that business confidence has weakened to the lowest in more than three years and, among the 12 monitored UK areas, only Northern Ireland held a weaker outlook than Scotland.

Sentiment has only been lower in the month following the EU referendum since the series began in July 2012, it also noted.

Malcolm Buchanan, Scotland board chairman for Royal Bank of Scotland, said: "The Scottish private sector remained close to stagnation in August, with only fractional growth signalled by the headline Business Activity Index.

"The manufacturing sector remained the main source of weakness, although the downturn eased since July. Meanwhile, activity growth in the service sector slipped to a marginal pace.

"Latest data highlighted a fall in new orders following two months of growth, whilst further evidence (of) spare capacity was reflected in employment as firms continued to shed jobs, with the fall in workforce numbers accelerating from July.

"Political uncertainty continued to weigh down expectations, with business confidence the weakest since July 2016.

"The level of positive sentiment in Scotland was the second lowest across the 12 monitored UK areas, with only Northern Ireland holding a weaker outlook.

"Overall, the forward-looking components of the survey suggest firms are expecting further challenging times ahead."