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London business confidence hits 10-year low

Business confidence in the capital is at its lowest level since the financial crisis a decade ago, new figures published by ICAEW show.

January 2020

Confidence among companies is now the lowest that it has been since 2009, according to ICAEW’s Business Confidence Monitor™ report for London, with Brexit uncertainty, the slowing global economy, and concerns over financial market stability casting a shadow over businesses.

Confidence in London is slightly lower than the UK national average, and has been generally in decline since 2014, in line with the national picture.

Some 38% of companies in London cite marketplace competition as a growing source of difficulty for them, among the highest to report this across all UK regions.

Harpreet Panesar, ICAEW Regional Director for London and the South East, said: “Business confidence in London has slumped to a 10-year low, driven by uncertainty. We hope that the new government will ease the strain on businesses and bring some much-needed stability to the economy.

The weakness in business confidence combined with slowing profits growth appears to be impacting investment rates across London-based companies. All forms of investment expenditure are growing at slower rates than nationally, and while capital investment and research and development budgets have both risen by 1.7% in the year to Q4 2019, both are still down from a year ago.

The Business Confidence Index in London stands at -22.8 in Q4 2019. Strikingly, London’s index has now been negative in 13 of the last 15 quarters.

As well as this, companies face a range of business challenges. 38% of companies cite marketplace competition as a growing source of difficulty, among the highest across all UK regions. Regulatory requirements remain the most widespread issue in the city, 48% of companies report increasing concern over these in Q4 2019, perhaps reflecting the importance of the financial services sector to the capital.

Read the full ICAEW Business Confidence Report for London

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