London firms warn inflation is top concern ahead of mayoral election
London businesses are still saying inflation is their top concern ahead of the mayoral election next week, City A.M. can exclusively reveal.
Despite the UK’s improved inflationary outlook, 60 per cent of firms were more concerned about inflation in the first quarter of 2024, compared to the same period of 2023.
The finding came in the London Chamber of Commerce and Industry (LCCI)’s latest quarterly economic survey, the Capital 500, which gauges private sector performance.
It comes just a week before the capital goes to the polls to elect the next mayor of London, with Labour incumbent Sadiq Khan campaigning for a record third term at City Hall.
The Conservative candidate Susan Hall recently narrowed Khan’s lead from 25 points to 19, but Labour criticised her manifesto launch on Monday for lacking business-focused policies.
The LCCI found firms also saw cashflow decline for the first time in a year, according to the Savanta-conducted survey, with business and energy costs remaining high in the capital.
Just under a quarter – 24 per cent – of firms said cashflow had risen in the first quarter of 2024, down from 26 per cent in the third quarter of 2023.
Karim Fatehi, LCCI chief executive, said the report showed “although there are fledgling signs of improvement, London businesses continue to shoulder the weight of high operating costs”.
He added: “2024 is a year of significant political importance for London businesses, with mayoral and London Assembly elections in May and a general election expected in the second half of the year.
“Chief among LCCI’s asks of the next government is a long-term, strategic plan to improve operating conditions for businesses.
“Without this, business confidence and the UK’s ambitions to secure higher levels of productivity and economic growth will stagnate.”
Firms did also express an upbeat attitude towards their hopes for the rest of the year, the LCCI found, with more than a third (35 per cent) of firms expecting prospects to improve in 12 months.
This was the joint highest finding since 2021, and just 19 per cent predicted a worsening.
Almost a third – 30 per cent – of firms surveyed also anticipated that London’s economy will grow over the coming 12 months. This was an increase on 28 per cent at the end of 2023.