Confidence in London’s economy within its business community is falling as Brexit approaches, according to new research for the London Chamber of Commerce and Industry.
The latest quarterly economic survey for the Chamber by pollsters ComRes, drawing on responses from over 500 London businesses, found a decrease in all “confidence indicators” in the fourth quarter of 2018 and that expectations for the capital’s and the UK’s economy are at their lowest since the start of 2016.
The percentage of companies saying they are looking to recruit also fell, to just 12 per cent, the second lowest yet recorded, and 61 per cent said they are operating below full capacity. Answers to questions about cashflow and investment also revealed anxiety about the future.
Responding to the findings, the Chamber’s chief executive, Colin Stanbridge, said, “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.”
Stanbridge called on the government to “urgently provide” more support and encouragement for small and medium-sized companies in particular and urged the principal candidates for the London mayoralty to “pursue an agenda of greater devolution to London” so that City Hall can do more to “drive and deliver future growth”.
In the light of the latest findings the Chamber recommends that London government should have greater powers to accommodate forecast population growth and retain more of the tax generated by the city in order to do so.
More specifically, it urges the London Mayor to look into compiling a “shortage occupation list” to help businesses find the worker they need, to liaise with business groups to “create a post-Brexit on-stop shop resource” at City Hall, and to look into exempting business and workspace from controversial permitted development rights in “areas of strategic importance to the economy”.
The Capital 500 results are published as financial services company EY reports that 20 City firms have announced plans to transfer assets out the London before 29 March, when the UK is scheduled to leave the European Union and that the number do so could be higher.
However, a report published last month by analysts Oxford Economics forecast that the capital’s economy will gather pace this year following a “lacklustre” 2018, despite “very weak” business confidence caused by Brexit an the broader political situation.