Weak Europe knocks firms in the capital

Tim Wallace
Follow Tim
OPTIMISM about the state of the economy has plummeted among London’s businesses, the Confederation of British Industry’s (CBI) bi-yearly business prospects survey showed today.

Most firms – 55 per cent – cited the threat of a double-dip recession over the next year as their major concern.

Only 13 per cent of firms in the capital feel “more optimistic” about prospects for the economy over the next six months.

That lowly proportion compares with 43 per cent who felt optimistic in June.

Hiring in London has taken a hit as a result.

The number of companies “only hiring when essential” has risen from 59 per cent in June to 64 per cent.

Twenty-three per cent of firms have implemented recruitment freezes, up slightly from 20 per cent six months ago.

“It’s clear that London business confidence has been knocked by the ongoing uncertainty in the Eurozone and weak demand and growth at home – we now need the Government to power ahead with its autumn statement plans to help businesses grow and create jobs,” said Sara Parker, London regional director.

However, companies do believe the Olympics may provide a boost.

Ninety-two per cent think the Games will benefit London internationally, and 78 per cent are “looking forward” to the event.

“It’s good news that the majority of the capital’s companies are now thinking about planning for the Games,” continued Parker.

“The event will showcase London as a world-leading business location, and highlight the success of UK firms in delivering a complex construction and infrastructure project.

“However, there is still more work to be done over coming months to make sure transport, staffing and security issues are ironed out.”