A shortage of skilled staff has overtaken transport issues as the biggest barrier to business in London, new research shows.

Sixty-one per cent of employers are suffering from a lack of key skills, an increase of 11% since 2005.

Companies in the property, professional services and transport sectors are worst affected, the report from CBI and KPMG reveals.

Specialist skills are most difficult to recruit, and almost two thirds (62%) of employers surveyed said staff training is the most worthwhile and rewarding form of business investment.

Forty per cent of recipients plan to increase spending on training and recruitment in the next six months.

Ian Barlow, London Senior Partner at KPMG, said that the country’s ability to compete in the global marketplace relied upon solving this skills problem.

“The skills shortages in the capital are worrying and if left unaddressed will affect London’s competitiveness. Business needs to be allowed to help shape the provision of skills training so that it becomes demand-led and equips people with the skills that employers are looking for,” he commented.

He added: “Addressing the skills shortage issue needs to be a priority for policy makers, whilst London’s employers also have their part to play. If we want to continue to build world-beating companies, which deliver so many jobs and so much prosperity to Britain, then employers need to have access to a skilled workforce.”