Domestic activity dropped sharply in the run up to the Scottish referendum, a survey of London businesses has revealed. Firms in the capital reported an 11 point decline in domestic sales from the previous quarter - with 19% of companies reporting an increase in domestic sales and 18% reporting a decrease, likely caused by uncertainty over Scotland's future within the UK.
The figures come as London Chamber of Commerce and Industry (LCCI) published the third quarter results of its "Capital 500" Quarterly Economic Survey, London's biggest and most authoritative business survey of over 500 business leaders, in partnership with leading polling agency ComRes.
Despite a fall in activity across some indicators, London businesses remain generally optimistic about their future prospects with over one-third (37%) of Capital 500 firms expecting improved company performance over the next year. More positive was news of firms displaying a growing willingness to invest in their business through staff training (up five points) and capital equipment (up seven points).
Interest rates remain a significant concern to Capital 500 businesses, with nearly a third (32%) more worried about potential rate rises this quarter than three months ago. With employment levels registering a six point decline in the last three months, the need to keep interest rates at a low level to maintain stability for businesses was firmly reinforced.