London should overcome its economic woes within the next 12 months, according to the latest economic forecast.

The economy in the capital is "technically" in recession, according to the consultancy CEBR - although it predicts things will improve early next year.

Whilst London has had two consecutive quarters of negative growth, CEBR rejects the claim that the capital will be stuck in recession for long.

"There has been a slight dip, the economy went off the boil - we can technically call it a recession (in London) but we can only call it technical,'' said an analyst with the group.

London has seen a substantial drop in confidence following September 11 - particularly in the areas of tourism, advertising and banking.

However, the group said Londoners were not bracing themselves for tough times.

"Although London appears to be in technical recession at the moment - we expect that this will only have lasted six months. Low interest rates and reviving business confidence will boost London disproportionately and we expect growth to start recovering in the New Year," says CEBR.