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The Federation of Small Business' London Small Business Index (LSBI), which measures confidence amongst firms, has fallen in Q4. The index score now sits at -61 after having been at -26 in the last quarter. Compared with year-to-date, the London Small Businesses are less positive about business prospects...

The Federation of Small Business’ London Small Business Index (LSBI), which measures confidence amongst firms, has fallen in Q4. The index score now sits at -61 after having been at -26 in the last quarter.

Compared with year-to-date, the London Small Businesses are less positive about business prospects for the next three months

Confidence in business performance for next three months flatlines as London businesses continue to suffer from economic uncertainty due to the pandemic

Close to one in three of London’s small businesses (30%) have decreased the amount of staff employed over the last three months of Q4

Overall sentiment towards profit is negative, with small businesses in London among the most likely regions to report a decline in profit in the last three months.

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The uncertainty in confidence witnessed amongst London small businesses is apparent across the country, with index scores among all regions in negative territory.

That being said, London small businesses report the highest levels of confidence for the next three months, when compared to other English regions, and is above the country average of -33.

The outlook for future revenue remains in negative territory in London. Once more, London businesses seem to be marginally more negative than their counterparts across the rest of the UK. A net balance of -24 expect growth in profits for the coming quarter, a figure less pessimistic in the East Midlands (-6), East of England (-17), North West (-23) and South West (-14).

Regarding the expected value of capital investment in the coming quarter, London shows a 5% positive difference among those expecting an increase versus a decrease.

While this proportion was slightly lower than in Q2, 2020, (8%), this still represents a positive result following on from Q1, 2020, where the percentage difference at that point stood at -24%.

In London and the UK as a whole, the general economic conditions in the UK, consumer demand and getting appropriately skilled staff are the greatest perceived barriers to growth over the coming twelve months.

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