'More optimism' among city firms

The survey found 28% of London firms expect the city's economy to improve

London firms are becoming more optimistic about their prospects in the recession, a survey has indicated.

A third of 226 firms questioned by the London Chamber of Commerce and Industry (LCCI) said they were positive about the future, compared with 29% in March.

But half of respondents said they expected inflation to pose problems for the economy in the year to come.

The survey echoed a British Chambers of Commerce survey which found "welcome progress" in business confidence.

'Crucial' time

The LCCI said the number of London firms that expected London's economy to improve had doubled from 14% in the first quarter of last year to 28%.

However only a fifth of larger London firms expected the economy to improve in the next 12 months.

LCCI Policy Director Dr Helen Hill said: "Clearly the government, the business community and its leaders cannot afford to be complacent at this crucial time.

"Concerns over rising unemployment and the threat of future rises in inflation and interest rates are indicative of the underlying structural problems in the economy."