Firms are stockpiling at unprecedented levels - with businesses in the East of England showing the highest percentage of capital tied up, a new study suggests.

The trend - which appears to be a reaction to political and economic uncertainty - means businesses are burdened with 'dead' money. This is putting pressure on cash flow, and potentially leaves them unable to access funds to manage unforeseen opportunities or challenges.

Aerospace and defence, industrial manufacturing and pharmaceuticals are among the sectors experiencing the fastest inventory growth, according to the Lloyds Bank Working Capital Index.

MORE - 'I would abolish job titles' says Adnams bossFirms in the East of England have 10.8% of total revenue tied up in working capital - a 47% jump in inventory levels since 2015.

The next highest stockpiler is Wales at 8.5%, then the south of England at 8.4%.

It means British businesses sitting on £593bn that could be used to fund growth, according to Lloyds.

Analysis of nearly 9,000 firms show a total of £142bn is tied up in working capital, a £15bn rise on last year and a £41bn hike on 2015.

Extrapolated across UK businesses with more than 50 employees, this equates to £593bn of excess working capital.

Working capital - the amount of money that a company has committed to the day-to-day costs of doing business - includes overheads such as stock and unpaid invoices.

Stockpiling has led larger firms to increase inventory by 33% on average in the last three years.

Looking ahead, more than a third of firms (35%) said business and political uncertainty was the biggest concern affecting the way they plan to manage working capital in the year ahead. This was followed by changes to payment terms (16%) and stockpiling (15%), although this was heavily weighted to manufacturers.

Ed Thurman of Lloyds Bank, said: "While businesses tying up significant amounts of cash can be an indicator of confidence, against a backdrop of uneven growth figures across core sectors, we shouldn't be complacent.

"Our research confirms businesses are stockpiling as a precautionary measure, in the face of political and economic uncertainty, to ensure they are in a strong position to face into any potential challenges. Such a deliberate response to an ongoing situation can be risky as cash invested in inventory is rarely easy to release."