A survey has found that London has received top marks for being the best city to invest in. Photo: David Iliff/Flickr

London is the best European city to invest in, according to the Ernst & Young’s Country Attractiveness Survey. London finished on top of the ranking for the seventh year running, with Paris and Madrid in the second and the third places.

The survey found that European businessmen are confident about London’s ability to rebound from the current economic crisis. The most cited reason was that "London is a cluster of education, entrepreneurship and opportunities and is able to attract talented people from around the world".

Mayor Boris Johnson welcomed the news. “These findings concur with a number of reports this week, which suggest that the recession might be beginning to ease."

“A key priority of mine throughout the past year has been to shout from the rooftops at every opportunity that London is the place to invest in and to visit. It also confirms that our work of ‘selling’ London abroad is paying off and our city is both winning through these tough times and looking forward to an extremely bright future,” Mr Johnson said.

A spokesman for the City of London Corporation said that he was delighted that London has retained its number one ranking in Europe.

“London is the only truly global financial centre in Europe because it is open to capital, talent and new ideas from anywhere in the world. But we must not be complacent. We must continue to invest in projects like Crossrail to make sure that London is fit for business for the future," he said.

However, John (name changed), a private investor based in London, thinks otherwise.

"For many years, London has been selling itself as a financial hub, displacing business from elsewhere by introducing lax regulatory standards for publicly listing companies or having less burdensome regulatory discipline," he said. "Now, all this is changing worldwide."

John thinks that the US is better prepared than the UK to recover from the financial crisis. He said: “Regulations are surely going to be more stringent around the world. During this deregulatory phase, however, the UK's financial sector, relative to its economy, has become almost double to that of the US. So there is more room to fall.”

“All in all, this survey cannot be taken seriously as any kind of economic or financial analysis,” John said.