London businesses gloomier over city's reputation

London companies are less confident of London's business reputation, according to the latest survey of attitudes by the CBI and KPMG.

Responding to the six-monthly London Business survey in September, 77% of firms said that they thought London was a good place to do business, down from 95% in the previous survey.

A third of respondents said that they thought London's status as a world city would diminish over the next five years, compared to just 13% two years ago.

The survey also highlighted the frustrations of London firms in their search for staff, with 78% complaining that they struggled to find people with the right technical skills.

Volumes of trade were also down, with 38% of respondents reporting that they have lost business, up from 16% in the previous survey. And 80% expected their sales and revenue growth to be hit by the economic downturn.

On a more positive note, 58% hoped that the 2012 Olympic Games would bring direct business opportunities for them.

Richard Reid, London chairman of KPMG, said: "The capital has felt the full force of the credit crunch and is facing tough challenges on many fronts; not just from the economic conditions but from new emerging financial centres, and the internal pressures of the City itself."