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London 'remains a strong centre for business'
General News |
01/07/2010
London remains a good place to do business, despite the government's austerity measures, a new study has found.
Research conducted by the Confederation of British Industry (CBI) and KPMG indicates that 53 per cent of firms based in the capital are optimistic about their business prospects, up from 47 per cent six months ago.
Some 58 per cent of the firms questioned expect to expand their UK operations over the next 12 months, and a third specifically within their London arms.
In terms of business investment, 31 per cent plan to increase spending on recruitment and training, IT infrastructure, equipment, and research and development, while 34 per cent will up their marketing spend.
Senior executives working in London appear happy, with 80 per cent describing the capital as a good place to do business, broadly in line with figures for January 2010 and July 2009.
However, 57 per cent of respondents harbour concerns that the new 50p tax rate may lead to a downturn in trade, as companies are encouraged to base themselves in other jurisdictions.
The cost of operating in London was cited as a weakness by 78 per cent of respondents, while transport infrastructure (46 per cent), skills shortages (44 per cent) and crime (47 per cent) was also deemed problematic.
Nigel Bourne, director of CBI London, said that despite the worries held by some business professionals, there is a growing sense of optimism among London's companies.
He noted that most firms rate the capital as a good or very good place to do business and feel more upbeat about the coming six months.
"We must continue investing in London's vital infrastructure and ensure it can compete with other cities globally. Nurturing home-grown talent is also going to be important during the recovery," Mr Bourne said.
Richard Reid, London chairman of KPMG, commented that the city will continue to be the driver of economic growth in the UK, but it is facing increasing competition from the fast-growing economies of the Far East.
"How we approach the problems of an ageing transport network in London will determine our future attractiveness and competitiveness," he stated.
Posted by Jon Aspinell
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