[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 15 August 2005, 18:24 GMT 19:24 UK
London attacks hit business mood
Police officer in Whitehall
The fallout from the London attacks is beginning to be felt
Confidence among UK businesses took a knock in the wake of the London bomb attacks in July, a survey says.

Businesses reported that faith in the UK's economic future fell to its lowest point since the start of the Iraq war.

The study, for Lloyds TSB Financial Markets, was carried out a week after the 7 July attacks.

In a separate report, the London Retail Consortium reported that shop sales in central London dropped sharply in the wake of the attacks.

Retail sales in the capital fell 8.9% last month on an annual basis, according to the consortium - the worst drop since its records began in October 2002.

Staying away

Though sales picked up slightly during the rest of July, they were still affected by tube disruption, security alerts and reluctance by consumers to travel into the capital.

A third report by retail business information group Footfall said that July shopper visits in the London region were down 10.1% compared to the same month last summer.

The ongoing effect is more worrying for the capital as this may reflect a permanent change in personal shopping habits
Helen Dickinson, KPMG

Tourists and day-trippers avoided central London's stores after Londoners and commuters had returned to them, meaning the number of weekend shoppers dropped sharply compared to weekdays.

Many shoppers have shifted their spending to regional locations away from central London.

"The ongoing effect is more worrying for the capital as this may reflect a permanent change in personal shopping habits and tourist numbers are also likely to fall," said Helen Dickinson, head of retail at KPMG.

Mood shift

The Lloyds TSB report, conducted by Continental Research, said 40% of businesses were pessimistic about the outlook for the UK economy for the next three months, compared with 26% in June.

Property firms, hotels and catering firms showed the steepest drop in confidence, the report said.

And the amount of firms expecting their own business prospects to pick up also fell to 42% in July from 55% in June.

The report is backed by findings from the CBI, released last week, which found that confidence among businesses had dropped in all parts of the UK for the first time in two years.

The CBI said its survey of 750 firms found 18,000 manufacturing jobs were cut in the three months to July, and blamed the economic slowdown for the reduction.

The BBC is not responsible for the content of external internet sites


Americas Africa Europe Middle East South Asia Asia Pacific