Nine in 10 London entrepreneurs think the economy's kaput

London's small firms are decidedly unimpressed with Osborne's efforts to turn around the economy with just one in 10 claiming to have seen an improvement in the last six months.

by Rebecca Burn-Callander
Last Updated: 09 Oct 2013

According to the latest London Business Monitor, a quarterly snapshot of the opinions of almost 250 SMEs, just 10% of the capital's small firms believe that the economic lever-pulling of Chancellor George Osborne and the Bank of England has helped the UK economy.

Shocking! Or perhaps not, given that the UK economy is still perilously close to the entering the dreaded triple dip, exports are down, growth in the services sector is sluggish at best, and the unseasonably cold weather of the last two months has hampered businesses across the country.

More than two-thirds of the firms surveyed are feeling gloomy about the UK's prospects for recovery, with six in 10 predicting yet more pain on the export front. And a quarter of firms are struggling to access the credit they need for growth, despite Vince Cable's Funding for Lending scheme, so it's little wonder that two thirds are sceptical about the effectiveness of government's proposed Business Bank...

When asked which economic issues were keeping business owners up at night, the weak pound topped the worry list for 65% of companies in the capital, up from less than one in five during January. With sterling down more than 6% against the dollar and 4% against the euro in the first quarter of 2013, driving up import costs, these worries are not unfounded.

In a more productive economy, cheap exports could help to drag the UK out of the economic ditch and the majority of London-based businesses are expecting an uptick in their international sales, reckons the LBM. But will it be too late to prevent a further quarter of contraction in GDP?

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