Improving London’s infrastructure – through the proposed Crossrail 2 rail link, a new runway at Heathrow airport and East London river crossings – is key to the UK capital’s future success and ability to compete, according to the latest London Business Survey from lobby group the Confederation of British Industry (CBI) and commercial real estate and investments group CBRE.
Eighty-four percent of London’s companies see Crossrail 2 as being central to the capital’s successful expansion, while 80% believe that sticking to the UK government’s current timetables for building Heathrow’s third runway is vital to the city’s attractiveness as a place to invest.
As the city continues to expand eastwards, businesses recognise the importance of developing the right infrastructure to support growth in the area, especially in the Docklands, and 84% of firms think that river crossings in East London are essential for boosting the city’s growth.
Despite the significant political uncertainty seen in 2016, London firms’ optimism has rebounded since the last London Business Survey (LBS), conducted just after the European Union (EU) referendum eight months ago.
Nearly one in five companies (19%) feel more positive about the economy over the next six months (against 4% in the last LBS). Firms are also more optimistic about their own businesses over the next half year, with 26% feeling positive against 8% previously.
“As one of the world’s few truly global cities, London’s star continues to dazzle at the start of 2017,” said Eddie Curzon, CBI London director.
“The capital’s businesses want to keep it that way, and recognise the importance of driving the city’s infrastructure forward to do so. By ploughing ahead with Crossrail 2, a new runway at Heathrow and making better use of the River Thames, London can keep ahead of the curve, and make the city an even more attractive place in which to invest, live and work for decades to come.
“While the uncertainty about the UK’s future relationship with Europe is weighing on minds in the City, it’s good to see firms beginning to bounce back from the Brexit effect, and having a more positive view of the economy than immediately after the vote to leave the EU.
“London’s voice must continue to be heard to make a success of Brexit and ensure the future prosperity of our capital, and the whole of the UK. The CBI will support the Government to secure the best possible outcome for the country.”
Adam J. Hetherington, CBRE managing director, London, added: “Transport infrastructure is crucial for the viability of office schemes in London. We expect schemes located along the new Elizabeth Line (Crossrail) to be among the best performing in London. The survey also reinforces our view that Crossrail 2 will unlock the potential along its planned south west to north east route.
“To the east of Tower Bridge there is only one bridge for 20 miles, the Dartford Crossing. To the west there are no fewer than 17. As the survey indicates, plans to redress this imbalance will be welcomed by businesses and help to unlock London’s growth potential.”
Topping the list of the capital’s business concerns is uncertainty over the UK’s role in Europe, with nearly 71% of firms concerned about the effect of Brexit. Following sterling’s sharp depreciation, price increases and inflation are also a source of unease (60%), marking the highest this issue has ranked since the Survey began in 2008.
Nevertheless, London’s businesses have remained resilient, with 54% maintaining their current investment plans – and over a quarter (26%) actually planning to boost them – and 58% believing Brexit has not impacted their ability to hire.
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