Business confidence has rebounded in London at the start of 2018, according to the latest statistics, but there are still concerns over running costs.

Figures compiled by the Federation of Small Businesses (FSB) showed that confidence in the capital experienced a clear resurgence after it fell to its lowest point in six years the previous quarter.

But genuine concerns over the price of doing business in London means that many small businesses are looking to change direction this coming year.

According to the latest FSB Small Business Index, 15 per cent of small businesses in the region intend to contract their business in the next twelve months by either downsizing, selling or closing it.

It comes after 76 per cent saw their running costs increase over the past quarter, compared to just six per cent that experienced a decrease.

More businesses have seen their gross profits fall than rise, and, over the past three months, 12 per cent of FSB members have reported a decrease in staff numbers while nine per cent noted an increase.

Sue Terpilowski, London policy chair at FSB, said: “This fresh data for 2018 shows how resilient and optimistic small business owners in London continue to be – that goes with the territory of starting and running a business.

“However, we must recognise that for many small businesses the cost of doing business is weighing them down.

“These businesses are beginning to feel like boxers taking jab after jab whilst on the ropes.

“Cost pressures include the high cost of rail travel which are putting additional pressure on wages for London businesses, the higher cost of employing staff generally and the heavy burden of cripplingly high commercial space costs.

“With the business rates revaluation from last April impinging on the bottom line, national and local government, along with the Mayor, must be on their side in 2018 to take businesses off the ropes and back fighting in the centre of the ring.”

The federation has called on the government to implement an increased inner and outer London small business rate relief threshold that reflects the specific problems faced in the capital.

This would see it rise from £12,000 to £20,000 in inner London and to £15,000 in outer London, the latter of which is the nationwide threshold in Scotland.