Brighter prospects for graduates as London firms look to expand

London-based businesses are returning to their customary recruitment levels and almost two-thirds are planning to expand in the coming year, according to a new poll.

The survey by the Confederation of British Industry and accountant KPMG found that 57 per cent of companies in the capital are now hiring "as normal", up from 45 per cent six months ago.

Over the same period, the proportion of firms making redundancies has fallen from 29 per cent to 20 per cent.

Fifty-one per cent of London businesses are optimistic about their prospects for the next six months and 65 per cent have plans to expand their operations in the coming year.

Almost nine out of ten (87 per cent) rated the capital as a good or very good place to do business compared with other major cities around the world and 78 per cent expected London's position to be just as strong or even stronger in five years' time.

Nevertheless, the optimistic outlook was tempered by lingering uncertainty over the economy. While 43 per cent of businesses felt more positive than they did six months ago, 31 per cent felt there had been no change and 26 per cent were less confident about the prospects for growth.

Indeed, the top concern for the year ahead was the risk of a double-dip recession, followed by the UK's tax regime and high inflation.

CBI London regional director, Sara Parker, said: "It's great news to see that more London firms are hiring as normal and redundancies have fallen. Many businesses are planning to expand, but this optimism is clearly tempered by uncertainty about the economy.

"London is a great place to do business. Companies view the city's talent pool, ease of access to global markets and proximity to clients as the capital's biggest strengths, but high operating costs and the fragile transport system are seen as major weaknesses."