Anxiety about the ongoing uncertainty in the eurozone is causing recruiters in London to halt their recruitment plans, despite overall business optimism being higher than six months ago.
The latest London Business Survey, carried out by the CBI and professional services firm KPMG, polled 264 companies in the capital.
Four respondents in 10 (41%) said that they feel more optimistic about economic prospects for the next six months. When the survey was last carried out, in December 2011, that figure stood at just 13%.
Further, almost half (47%) of London businesses said that they feel more positive about their own business prospects over the next six months - up from 31% in December.
However, worries about the eurozone have prompted some businesses to freeze their recruitment activity. The proportion of respondents that have put their hiring on hold has more than doubled in the last six months, from 23% to 51%. Of the respondents, only 16% said that they are hiring as normal, compared with the 54% that were doing so in December.
Sara Parker, CBI London region director, said: "In this milestone year for London, it's great to see that the capital's firms are more optimistic than six months ago, but the shadow cast by the eurozone crisis continues hang over businesses and the economy.
"Increased eurozone anxiety means employers are reluctant to invest, take on new people or expand their businesses."