Financial services firms are full of optimism following three months of surging business volumes and higher profits, a new set of survey data shows today.
However, the survey was undertaken prior to the introduction of a bank levy that was announced in the recent Budget.
The survey was also blighted by a decline in employment as companies make their operations leaner and refocus activities as a result of new capital rules and regulatory requirements.
Improved optimism over the past three months was reported by 59 per cent, according to the figures released by the Confederation of British Industry (CBI) and financial services firm PwC.
It compared with the nine per cent who said they had become less optimistic – giving an overall balance of 50 per cent. The balance is the strongest since 68 per cent in December 2013.
Greater business volumes were seen by a balance of 24 per cent of firms while a balance of 34 per cent expect them to increase over the next three months.
Higher profits were reported by a balance of 49 per cent of firms. However, a balance of minus 24 per cent said staff numbers had fallen.
Firms remained upbeat as profits held up, despite weak growth in business volumes in some sectors, especially banking,” said Rain Newton-Smith, CBI director of economics.
“The overall headcount in financial services fell for a second consecutive quarter, driven by banks cutting staff as they make their business operations leaner, refocusing activities as a result of new capital rules and regulatory requirements.”
“Despite continuing strong growth in optimism, this survey was conducted before the Budget, so it’s possible that yet another change to the bank levy may have dented the upbeat outlook in the sector.”