London firms happier than rest of UK

LONDON firms are more than twice as optimistic as businesses in the rest of the country, a new survey shows.

A poll of 1000 accountants by the Institute of Chartered Accountants and Alliance & Leicester found that business confidence has dived across Britain over the past three months in response to rising interest rates and the prospect of slower growth.

But confidence in the capital has been bolstered by the high proportion of IT, banking and finance and business services firms which are enjoying buoyant growth.

The survey's confidence index for London is 15.5 compared with a UK index of 6.1. However, the London reading is well down on the 34.6 recorded in the May survey, indicating that firms in the capital are not immune to higher borrowing costs.

Recruitment growth is expected to accelerate slightly in London, and both profits and turnover are forecast to outstrip the national average, both rising by 5.5% over the next year.

Tony Morwood-Leyland, president of the London Society of Chartered Accountants, said: 'Businesses in London are the most confident of all regions about their prospects. It will be interesting to see how the impact of interest rates affect businesses in the capital over the coming months.'