The research done jointly with KPMG also showed optimism about their own business prospects has fallen from 51% to 31% over the same period.
In the latest bi-annual survey of 262 London business leaders, just over half (55%) say their top concern over the next year is the threat of a double-dip recession.
But companies are now less concerned than six months ago about reduced public sector spending which has dropped from second to seventh place.
Although half (51%) of firms still think that public sector spending cuts will have a moderate impact on their business (down from 71% a year ago).
The number of companies only hiring when essential has increased from 59% in June to 64% in this survey, with 23% of businesses implementing recruitment freezes, broadly the same as six months ago (20%).
Sara Parker, CBI London region director, said: “It’s clear that London business confidence has been knocked by the ongoing uncertainty in the Eurozone and weak demand and growth at home.
“We now need the Government to power ahead with its autumn statement plans to help businesses grow and create jobs.”
Companies’ expansion plans remained at the same level as in the June survey with 58% of firms planning to expand over the next twelve months, 42% looking to do so in London.
London businesses think that employment regulation is the most burdensome area of regulation, which has moved up from second place six months ago, followed by taxation, and health and safety.
Companies say the burden of bribery and corruption legislation has increased in the last six months, and they now rank this as the fourth most burdensome area of regulation (up from seventh place last year).
