Survey reveals financial services sector is growing

| June 28, 2010 | 0 Comments

A quarterly survey of the UK’s financial services sector by PricewaterhouseCoopers (PwC) and the Confederation of British Industry (CBI) has revealed that the industry is growing, albeit at a slower pace than expected.

According to the survey, activity in the sector in the last three months has grown at its fastest rate since September 2007, but growth was weaker than expected.

The sector recorded its fourth consecutive quarter of growth but companies expect this to level off in the next three months.

Companies were asked how their business volumes fared in the three months to June and 38% said that volumes grew, while 29% said they fell.

The resulting balance of + 9% was the most positive since the collapse of Northern Rock in September 2007, but was lower than expectations.

Commenting on the findings, John Cridland, the CBI’s deputy director-general, said: “This survey was conducted when financial markets were feeling the intense strain from fears over euro area sovereign debt and, for the first time in over a year, a notable minority of firms were worried that the risk of further market deterioration is high.

“A high proportion of firms is worried about the impact of prospective regulation on their business, and many remain concerned that red tape will hamper growth prospects in the year ahead,” he added.

“Firms have also become more worried about increased competition within the sector, particularly from new entrants and from overseas.”

Meanwhile, the survey said the number of people employed in the financial services sector continued to fall, however, the drop was slightly slower than expected.

However, firms expect staff numbers to grow in the next quarter.

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