Confidence in London economy 'highest since recession'

A survey of London business owners has revealed that confidence in the capital’s economy has reached the highest level since before the recession.

The London Chamber of Commerce and Industry (LCCI) discovered that confidence levels are 43 per cent higher now than when the survey was conducted in the final quarter of last year. Meanwhile, nearly half of businesses (47 per cent) in the capital believe their prospects will improve in the next year.

Furthermore, 71 per cent of London employers have revealed that the size of their workforce has not changed in the first quarter of this year and investment levels in location and equipment is at

That said, the balance of exports markets stagnated in the first three months of this year, while the balance for future exports fell into negative territory for only the second time in nearly three years.

LCCI spokesman Iain Smith believes that while major events such as the Olympics and the Diamond Jubilee have helped to boost business confidence in London, it is not exclusively responsible for the renewed hope.

He said: “2012 in London is going to be a big year with the Olympics and the Diamond Jubilee coming up but generally there is a sense that the economy is on the up in London and that has had an impact on firms all over. They are looking to invest more, they’re not laying off staff and they are just more hopeful for the year out.”

Smith allayed fears that the UK’s return to recession would affect business confidence in the capital because he believes most business owners were aware that it was a distinct possibility and that the London economy is rarely indicative of the rest of the UK as it usually performs better than national figures suggest.

While the news that business confidence in London is on the up is welcome, Smith believes it is vital that the Government does not rest on its laurels.

He said: “The Government can’t afford to be complacent so having this relentless focus on the competitiveness of the London economy is essential as our competitors are going to be taking notes of every tax change we make so it’s really about remaining aware of what our competitors are doing and staying one step ahead.

“We are a global economy now so it’s important that we try to compete with other major economies.”