Yorkshire venture capitalists say they are confident that deal activity will pick up over the next six months.

Disposals of non-core subsidiaries are set to provide the biggest source of opportunities, according to professional services firm Deloitte & Touche.

In its latest private equity confidence survey, almost half - 47 per cent - of the venture capitalists surveyed said they expect an increase in the volume of transactions.

Only five per cent anticipate an actual fall in deal flow.

But 25 per cent of VCs said they expect the economic climate to deteriorate, with just 17 per cent anticipating an improvement.

For the last quarter the figures were four per cent and 37 per cent respectively.

David Frith, director of Deloitte & Touche Corporate Finance in Leeds, said: "The opposing views on the economy and deal activity illustrate that venture capitalists hope to capitalise on the tough economic conditions, with reduced competition from trade and lower pricing.

"Indeed, 54 per cent of the VCs surveyed expect deal pricing to reduce over the next six months as stock market volatility takes it toll."

Mr Frith added: "Add to that the large private equity funds available and VCs look set to dominate merger and acquisition activity for the period ahead."