London bounces back despite worries over economic future

 
Julian Harris
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LONDON’S businesses are recovering strongly from the recession, a survey revealed yesterday.

More than two in three (68 per cent) businesses in the capital plan to expand in the coming six months, while hiring intentions are rocketing.

Last year only 11 per cent of employer planned on hiring at normal rates. Yet now 45 per cent will be recruiting, according to the survey conducted by the CBI with consultants KPMG.

And the proportion of companies planning to make redundancies over the next six months fell to 29 per cent, from 53 per cent a year ago.

This is despite lingering concerns over the state of the economy.

Twice as many managers were pessimistic about the economy as optimistic.

There was positive news for the coalition, though, with an extraordinary 97 per cent of respondents supporting the spending cuts.

Earlier this year the Centre for Economics and Business Research showed that London has the lowest reliance on government spending out of all regions. London’s proportion of GDP reliant on the state is 15 per cent lower than the UK average, they said.

Yet businesses are unhappy at levels of burdensome regulation, with 63 per cent saying this has become worse over the last year.

“The government must find the right balance between maintaining essential legislation and cutting unnecessary red tape,” said Sara Parker of the CBI.

And 69 per cent of respondents said the Conservatives’ proposed cap on immigration would negatively affect their recruitment from overseas.