Plan B curbs provide a shocking blow to London’s business confidence

Wednesday, January 12, 2022 at 06.00

A sharp drop in consumer confidence from Plan B measures to curb the spread of Omicron has weakened the trading environment for the capital’s businesses, leaving them sweating over the state of the London economy, according to the London Chamber of Commerce and Industry (LCCI) (Photo) by Chris J Ratcliffe / Getty Images)

The cooling impact on the UK economy, which has been inflicted by the reintroduction of Covid-19 restrictions, has hit business optimism in London, a new study published today reveals.

A sharp drop in consumer confidence from Plan B measures to curb the spread of Omicron has weakened the trading environment for the capital’s businesses, leaving them sweating over the state of the London economy, according to the London Chamber of Commerce and Industry (LCCI).

One in three London companies expects the capital’s economy to weaken over the next year, a sharp increase from 21 per cent previously, according to surveys conducted by LCCI.

The British were urged to cut back on socializing and work from home in December when the British government reintroduced restrictions on everyday life amid soaring Covid-19 cases driven by the Omicron strain sweeping across the country.

However, Plan B measures apparently failed to reduce virus transmission, with cases consistently breaking record highs throughout December.

The measures threw a frost on the crucial Christmas shopping period for the capital’s hospitality industry, as consumers flocked out of city centers and businesses in the Square Mile canceled parties.

Nearly two in five London companies expect the borders to hit the wider UK economy.

Richard Burge, CEO of Industry (LCCI), said: “The severity of Omicron’s impact on London’s business and business leaders’ views on local and national economies.”

“Compared to the period of growing optimism witnessed in the third quarter, the results of this study are a stark reminder of the tumultuous conditions in which companies are trading.”

LCCI’s research illustrates the intense pressure that capital companies are under to stay profitable in the midst of a cost attack.

Energy bills at around 64 per cent of London’s businesses have risen, while 45 per cent have seen an increase in raw material costs.

Vicky Pryce, chief financial adviser to the Center for Economic and Business Research, said: “Higher inflation, primarily due to a sharp rise in energy costs but also reflecting worsening staff shortages and supply chain problems, has pushed up input costs.”

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