Confidence drops at capital's firms

CONFIDENCE among London firms has plummeted over the past three months, a survey shows.

But firms in the capital are still more than twice as optimistic as those in the rest of the country.

A poll of nearly 1000 accountants by the Institute of Chartered Accountants found confidence has dived amid worries the economy is past its best and uncertainty about interest rates.

The survey's confidence index for London is 12.6 compared with a national average of 6.2. However, the London reading is well down on the 25.4 recorded in the November survey. Manufacturers and retailers are the most gloomy.

London firms expect turnover and profits to rise by 6.7% over the next 12 months compared with about 5% last year. Investment spending will increase by 3.8% and staff numbers by 2.2%.

Tony Morwood-Leyland, president of the London Society of Chartered Accountants, said: 'The sustained confidence of London's business community is very encouraging. However, firms' expectations of more profitable business growth must be set against the possibility of an increase in business rates and an extension of the congestion charge scheme having a negative impact.'