Financial services sector optimism grows

Business optimism in the financial services sector reached its highest level for almost 17 years in the three months to September, a survey from the Confederation of British Industry (CBI) has found.

According to it CBI's Financial Services Survey, 59 per cent of businesses feel more optimistic about their overall business situation, while only six per cent feel less optimistic.

The ‘surge' in optimism came from a number of key drivers:

  • profits in the sector rose for the fourth consecutive quarter and are expected to grow strongly in the next quarter
  • the number of people employed in the financial services sector in the three months to September 2013 increased at the fastest rate since September 2007
  • employment is expected to grow by 10,000 in Q3 and 2,000 in the final quarter of the year.

While optimism grew, business volumes fell unexpectedly - driven by falling business with industrial and commercial companies and overseas customers.

Stephen Gifford, director of economics for the CBI, said: "With optimism rising and jobs and profitability growing, this is an encouraging quarter for the financial services sector, despite a fall in business volumes in banking."

"Firms are expecting positive momentum to carry into the next three months, alongside a strong recovery in business volumes, which will boost profits further. 

"Financial services companies are less worried than they were about a potential lack of demand, but dealing with regulation is increasingly weighing on plans for business expansion."