London's economy expanded in June for the first time in five months, according to a Royal Bank of Scotland (RBS) poll.
The rebound was driven by an increase in output and new orders for the first time since the Iraq war. But despite the welcome up-turn the capital remain sceptical that improvement can be maintained.
Stuart Porteous, senior economist at RBS said: 'This is great news for the economy. London has been lagging the rest of the UK in recent months following the end of the war in Iraq, but the sharp rebound in activity means London is back in the usual position as one of the fastest growing regions in the UK. If trends across the rest of the UK are anything to go by recovery looks sustainable.' London firms' optimism over their own future performance is sinking though and they believe the capital will soon be trailing the rest of Britain again. A separate report from the London Chamber of Commerce and Industry shows a net 21 per cent of firms expect their performance to improve over the 12 months, down from 29 per cent three months ago.