Growing share of London businesses have upbeat outlook on profitability

Liz Giles, Policy and Communications Director at the London Chamber of Commerce and Industry, talks to Sarah Dale about the current London landscape as its quarterly economic survey is published.

London businesses are “fatigued of the doom and gloom” of recent times and an upbeat outlook is apparent within the community.

“At the British Chambers of Commerce conference, there was quite a lot of optimism,” said Liz Giles, Policy and Communications Director of the London Chamber of Commerce and Industry (LCCI).

“People have become fatigued of the doom and gloom; it’s summertime and we are into the next financial year. There is a level of optimism in business, but in a pragmatic way.”

Recruitment activity also picked up during the quarter, particularly for part time positions. Of the businesses hiring, 56 per cent were recruiting for part-time roles, up from 36 per cent in the previous quarter. Meanwhile, the proportion of firms filling full-time roles fell from 70 per cent to 61 per cent, though this remains higher than in Q4 2024. This shift reflects a growing preference for flexible staffing arrangements as firms try to navigate meeting growing operational needs during economic uncertainty.

LCCI’s quarterly economic survey

The LCCI, which has more than 10,000 members, has recently published its latest quarterly economic survey for London.

The upbeat outlook is underpinned by significant gains in domestic sales during Q2 2025. The proportion of firms reporting increased sales rose from 23 per cent to 30 per cent, the highest level recorded in over a decade. This improvement in sales sentiment was seen across both large companies and SMEs. Similarly, 31 per cent of London firms reported an improvement in cash flow, an increase of 7pp versus Q1.

Despite this, and against the backdrop of ongoing geopolitical tensions and uncertain global markets, the strengthening domestic conditions contrast subdued export trends. In fact, just 9 per cent of London businesses reported an increase in export orders last quarter, indicating weakening export demand.

Operational pressures remain a key concern for firms. Businesses continue to grapple with unprecedented operating costs across the board, driven primarily by utilities and fuel, with 66 per cent of firms reporting an increase in energy costs in the past three months. Rising operating costs have been further exacerbated by wage pressures and inflation, the latter of which remains the dominant concern for London’s business community. Well over half (59 per cent) of businesses were more concerned about inflation in Q2 than in the previous quarter.

London as a global city

“As we have always said, London is the gateway for economic prosperity across the UK and if London and other big cities in the UK grow, it benefits everywhere in the UK,” said Liz.

“To remain a global economic powerhouse, London must safeguard its competitiveness and attractiveness to ensure it remains a destination for inward investment.

“New trade deals have opened a raft of new opportunities, but we must not be complacent, some regulatory barriers need to be unlocked, and supply chains require greater resilience. Only then can real economic growth happen.

“There is no blueprint for success, it’s an organic process that is informed by established principles and ways of working, with regular reflection and horizon scanning that explores new ideas and perspectives. Businesses also need an environment that is both conducive to growth and economically sustainable – this includes more favourable business rates, efficient transport links and infrastructure, access to a pipeline of talent and skilled workers, digital accessibility and resilience, and long-term public/private investment.

“With Labour entering its second year of Government, businesses are still on standby for clarity on several key issues but if the last six months have taught us anything it’s that London is open for business and ready to seize new opportunities.”

The aim of the LCCI is to retain London’s competitiveness and attractiveness as a global city and elevate it as a destination for inward investment. This means that there must be a focus on international trade, including trade deals, tariffs, regulatory barriers, international travel and global supply chain resilience, and there is a need to leverage LCCI's trade advisory services to build strategic international partnerships.

The LCCI has divided these into the following areas:

Unlocking London’s Growth Potential

• Support growth in key sectors, including financial and professional services (including the London Centre for Arbitration and Mediation), technology (including Innovate UK) and sustainability

• Address key business taxation issues, including business rates, Employer National Insurance contributions, Capital Gains Tax, Business Asset Disposal Relief, Research & Development (R&D) tax relief, and Business Property Transfer

• Engage with key stakeholders, including the Greater London Authority, City of London Corporation and Department for Business & Trade

People and Skills

• Address skills shortages and promote workforce diversity through policies that support education, training, apprenticeships and immigration

• Navigate changes in employment regulations, advocating for policies that balance employee rights with business needs

Sustainable Future for London

• Promote sustainable development in London, focusing on infrastructure, transport investment, green construction and planning reform

• Advocate for a smooth green energy transition, supporting decarbonisation, energy efficiency and the future of sustainable aviation 2025 and beyond

“Growth is the next big focus,” added Liz. “There will also be a big focus on tech and aviation expansion plans at Luton and Heathrow, and transformation plans at Stansted.”

The LCCI also continues to work with the Metropolitan Police to tackle business crime and crime against women and girls in the capital.

“London is a great city; we have so much history and diversity and it’s such a vibrant city. We have to ensure that we retain its position of being open for business.” www.londonchamber.co.uk/policy-campaigns/policy-publication/about-our-policy-and-campaigning/