London businesses see costs drop

PROFIT margins in London are picking up faster than elsewhere in the country after a drop in business costs, a report has said.

The latest business price index (BPI) — an analysis of wage costs, borrowing and raw materials — fell to minus 1.1 per cent in the capital in March.

The figure compared with minus 0.8 per cent in February and minus 0.9 per cent across the rest of the UK, according to Fathom Financial Consulting and the London Chamber of Commerce which published the data.

Fathom director Erik Britton said: “London businesses are benefiting from cheaper borrowing costs and lower wages which are more important in their overall cost structure than across the UK as a whole.”

Dr Helen Hill, director of policy at the LCC, said: “Downward pressure on costs for London businesses is good news, but we need to see sustained growth in demand for financial and business services before we can be sure the period of underperformance in London is over.”