A concerning proportion of businesses in London expect the UK to go through economic decline over the next 12 months, according to new research.
In the latest economic survey conducted by the London Chamber of Commerce, it was found that as many as 60% of London firms expect some level of decline in the next year.
The survey, which was the first conducted by the group since the outbreak of the war in Iran, cited inflationary pressures, rising operating costs and subdued investment as the primary concerns causing this anxiety.
Part of the issue is political turmoil. With minimal confidence that any given prime minister can be expected to stay in office for a full term, it can be hard to plan ahead with assurance.
Just over half (51%) of firms have reported higher energy costs in the last quarter, while 57% faced increased fuel costs.
“These findings should serve as a clear warning to the incoming prime minister that London’s economic landscape is failing to provide the conditions firms need to grow. Confidence remains weak, while rising costs continue to restrict investment, recruitment and ultimately growth,” said Karim Fatehi, chief executive of the London Chamber of Commerce and Industry.
“Small businesses are being hit hardest. With less capacity to absorb these further costs, SMEs are increasingly being forced to postpone investment and hiring, despite being central to jobs and growth across London’s high streets.”
Fatehi noted that despite the “heightened geopolitical uncertainty”, there is an “opportunity” to “act decisively to restore confidence” to businesses.
For Fatehi, that means “easing the cost burden on businesses” and “setting out a clear strategy to unlock investment in skills and infrastructure”.
It is also clear that the incoming prime minister must ensure lowering energy costs is high up on their to do list.
