London Chamber of Commerce & Industry: Capital 500 London Quarterly Economic Survey – Q1 2024

On 23 April the London Chamber of Commerce and Industry (LCCI) issued its Capital 500 London Quarterly Economic Survey for Q1 2024 (the QES), prepared by respected market research consultancy, Savanta, and proudly sponsored by haysmacintyre.  The QES covered 504 London businesses’ views on areas such as demand, recruitment, training and investment and reports on a net balance basis, providing the difference in percentage of businesses surveyed that reported an increase minus those that reported a decrease.

It is pleasing to see that business confidence remains in positive territory for both profitability and turnover expectations for the next 12 months, at +28, albeit slightly down compared to the last quarter.  Overall company prospects rose from +11 to +16 between the quarters.  The economic outlook for London has returned to positive territory (+3) for the first time in two years and remains +12 ahead of the UK economy as a whole; this underpins the importance of the London economy to the country and is a reminder of the economic microclimate surrounding London.   Notwithstanding the net negative score for the UK economic outlook (-9), this is the highest it has been for the last two years and continues the gradual improvement in sentiment over this period suggesting the grey light of an economic growth dawn maybe coming.

Possibly unsurprisingly, business cost pressures remain high with 60% of respondents being more concerned about inflation in Q1 than they were in the last quarter.  More worryingly, for those looking for interest rate cuts in the short term, is that 42% of businesses expect to raise their prices in the next quarter which will not help the Bank of England’s mission to bring inflation back to the 2% target.   Also, with wars continuing in Ukraine and the Middle East, an unexpected economic shock cannot be ruled out, especially if energy supplies are adversely impacted and de-globalisation sets in.

Whilst the UK, according to the Office for National Statistics, suffered a technical recession in the last six months of 2023 the QES gives us grounds for believing London, at least, will show some growth during 2024.  However, it is likely more records will be broken in Paris this summer than on the economic front back home.

For more information, contact Ian Daniels or view more insights on the LCCI website.