Capital consumer confidence rally

CONSUMER confidence in London has staged a dramatic bounceback from the lows since 11 September, while the capital's small businesses are also in good heart, surveys has revealed.

In the first three months of the year, London's feelgood factor, measured by a number of consumer indicators, hit its highest since the first quarter of 2001, with optimism about the future for the economy at a two-year high.

More people were prepared to make a major purchase than at any time since the middle of 2000.

But overall confidence, according to the survey from economic analysts Business Strategies, was lower than elsewhere in the country.

Report author Melanie Lansbury said: 'This reflects the severe effects of 11 September on the tourist and finance industries in and around the capital.'

Londoners remained worried about job prospects, with more concerned about being laid off than those not. However, the percentage of job worriers was lower than in the previous quarter.

The figures chime with recent evidence that consumer confidence in London is being buoyed by the city's ballooning housing market. People are borrowing more against the value of their homes than ever before to spend on white goods or large purchases such as cars. Unsecured lending is also at an all-time high.

Meanwhile, another survey today found that a high proportion of small and medium-sized enterprises (SMEs) were expecting to hire new staff in the coming months.

A total of 31% of London and South-East respondents to the poll by accountants PKF had to make staff redundant in the second half of last year, but 62% of them are planning to recruit in the final six months of this year.

That showed the London job market swinging more extremely than across the country as a whole, where the figures were 28% and 59% respectively.

However, against a backdrop of high property prices and low unemployment in the capital, 67% of SMEs reported finding it tough to get good staff. In the face of stiff competition among employers, potential workers were expecting everhigher salaries.

The number of companies across the country offering pension schemes soared from 50% in 2001 to 81% in 2002.