London business confidence drops

News Article - 10 August 2007
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Business confidence in the UK's capital has fallen amid a culture of rising interest rates, a study has shown.

The latest business confidence monitor from the Institute of Chartered Accountants in England and Wales (ICAEW) has highlighted London as being the country's least optimistic region.

Confidence dropped from a high of +13 last quarter to +1.8, while the overall outlook from the whole of the country also slipped, falling to +4.8 from +11.5 previously.

ICAEW chief executive Michael Izza said: "These are clear early warning signs to which Government needs to be alert. The position of the City as a leading capital market cannot be taken for granted."

The study also found that the economy is likely to grow at a slower pace during the second half of the year and commented that rising interest rates were of particular concern in relation to the housing and consumer markets, which will face financial strain.

Meanwhile, a recent survey by the IIB Bank and ESRI found that consumers in Ireland are not feeling optimistic, with confidence falling to its lowest point since October 2003.

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