London firms cautious over double dip for UK economy

ALMOST half of London businesses are pessimistic about the sustainability of the UK’s fragile return to growth, with many firms predicting that the economy is poised to dip back into recession before regaining full health.

Now 47 per cent of London firms say they expect a “double-dip” recession before the year is out, according to a survey by the London Chamber of Commerce and Industry (LCCI). That compares to just 29 per cent of the businesses polled which anticipate a return to sustained economic growth.

However, when asked about the state of the public finances, over half of companies surveyed said they believe the government can reduce the fiscal deficit without damaging the UK’s economic prospects.

LCCI chief executive Colin Stanbridge said: “The government needs to take heed and deal with the UK’s public debt to restore confidence in UK markets and keep businesses free from the burden of higher taxes and onerous regulation.”

The result of the survey will come as welcome news for the Tories, who have been roundly criticised for plans to introduce swingeing spending cuts immediately after an election, which some warn may damage the economy’s chances of recovery.