London’s optimism evaporates amid Brexit uncertainty
The ICAEW Business Confidence Monitor for the third quarter of 2018 reveals a darkening outlook for business in the capital, as Londoners stay away from the shops, weaknesses emerge in the property market and rising regulations take their toll.
The confidence of London businesses has returned to negative territory, at -5.7 in Q3 2018, according to the latest ICAEW Business Confidence Monitor. This compares to the national average confidence rating of -0.2, which reversed the trend of the last 12 months.
The results for London will be particularly disappointing as confidence levels had reach +3.4 in the second quarter of 2018. This was still below the national average, but it hinted at a return of optimism. Such optimism now appears to have been short-lived.
One explanation of London’s comparatively poor confidence levels is a slowdown in domestic sales, which in the capital are up just 2.9%, below the national average of 3.5%.
Harpreet Panesar, ICAEW London Director, said: “London relies heavily on the banking and finance and property industries, all of which have been hit hard since the vote to leave the EU, and with a deal yet to be made, businesses are remaining cautious.
“The capital has been hit by weak sales growth, and despite profits growing, this continues to cause problems for many businesses. Business costs, including business rates, are increasing at a quicker rate which is making companies reluctant to invest.”
Other findings include:
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