Confidence sinks to three-year low among London businesses

Confidence among London business owners has plummeted to its lowest point in three years as sales and cashflows dry up.

A poll of 500 businesses in the capital showed companies are less optimistic about the city’s economy than at any time since the survey began in 2016.

However the study, commissioned by the London Chamber of Commerce and Industry, found that businesses were overall more positive about the economy in London than the rest of the country.

The chamber called on London mayor Sadiq Khan and mayoral candidates to keep more of the capital’s tax in the city and set up new initiatives to help businesses, including a round-the-clock service base in City Hall.

“Capital 500 is London’s largest business survey and, with all business confidence and economic indicators falling and cashflow balance at a record low, these results should act as a wake-up call for the government,” chief executive Colin Stanbridge said.

“With the next Mayoral election just over a year away, commitments from the main candidates to pursue an agenda of greater devolution to London would also be welcome – as retaining more of the tax generated in the capital and securing new policy competencies would ensure City Hall has the necessary resources to drive and deliver future growth.”

The news could also hit consumers as more businesses now expect to increase prices in the next three months, blaming the cost of raw materials and overhead charges.

Firms also said they were being hit by increased energy and fuel prices, putting pressure on bottom lines.

“It is staggering that we are now weeks away from leaving the European Union and businesses still don’t know the terms of that departure and what preparations they require, government must urgently provide that clarity. Businesses, particularly those small and medium sized, need support and encouragement in these exceedingly turbulent times,” Stanbridge said.