London firms had 'tough start to 2011', says survey

Businesses in the capital had a tough start to 2011, according to the London Chamber of Commerce and Industry (LCCI).

Its quarterly survey of companies showed 40% of firms had seen their cash flow worsen, up from 31% last quarter, and only 44% of businesses expect to see profits rise, down from 51%.

There were also falls in other areas including turnover and domestic sales.

The LCCI said the government should help cut red tape to boost the economy.

'A disappointment'

The survey showed 45% of employers expect things to improve, down from 53% when asked three months ago.

And they are even less confident about London, with 32% saying they expect the capital's economy to grow, down from 37% in the previous quarter.

A total of 133 companies responded to the 2011 Quarter 1 Economic Survey.

Peter Bishop, deputy chief executive of the LCCI, said: "The first few months of the new year were frankly a disappointment as companies in the capital endured lukewarm trading conditions.

"Doubts seem to be persisting about the strength of the global economy which in turn has led to many firms adopting a more cautious approach in their business dealings.

"The government must do all it can to help the business community while the economy struggles, in those areas in which it has real power.

"Tackling red tape would be a great start and we urge departmental ministers to think twice when introducing new legislation and look at those areas where rules and regulations can be simplified or even scrapped."

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