London-based businesses are less optimistic about the future than they were just three months ago, according to business group the CBI.

Research involving 120 companies revealed that only 42% of respondents were more optimistic about the economy than they were in the previous quarter.

The figure was 59% in the same survey conducted during the third quarter of 2014.

Meanwhile, less than two-fifths of businesses are more optimistic about their own business’ short-term potential compared to 47% previously.

Lucy Haynes, CBI London director, said: “Overall, London has had a good innings in 2014. Throughout the year, firms have been upbeat about the economy and their business prospects, but optimism has dipped recently against the backdrop of a sluggish Eurozone and increased geopolitical tensions.

“The capital’s businesses are raising concerns around the uncertainty of the UK’s role in Europe, so we must continue to explain why British membership of a reformed EU is important to jobs and growth in London and the rest of the country.”

In more positive news, the survey also found that expansion plans remain robust, with nearly two-thirds of respondents planning to grow in the coming year.