London firms less cheerful

OPTIMISM among London companies has plummeted over the past six months, with firms in the capital more gloomy about prospects than their peers in the rest of Britain.

Profitability expectations have been worst hit, with the proportion of firms who think their profits will increase falling sharply, from 23% in January to just 8% now. Only a quarter enjoyed increased profits in the first half of the year, down from 38% in the second half of last year.

The findings come in a report from Lloyds TSB, which polled 250 London firms with turnover above £1m. Other grim findings included falling turnover and scaled-back investment intentions.

Nearly a quarter (24%) said they had experienced cashflow problems over the past six months, above the national average of 18%.

The findings are at odds with a CBI report that found that London and the South-East was one of only two UK regions to have enjoyed a Baghdad bounce.