Financial services firms are expected to up the pace of hiring towards the end of the year, according to the latest Financial Services Survey from PwC and the Confederation of British Industry (CBI).
Headcount is predicted to be stable in banks and fall in building societies, but increase in all other sectors.
Firms are also looking to invest outside of human resources, as the survey puts IT spending at the fastest pace since March 2015. Investment in marketing, land and buildings and vehicles, plant and machinery is also expected to rise – this is the first time planned investment in land and buildings has risen since 2014.
“This quarter’s survey finds levels of employment stabilising for financial services firms, and almost two thirds will boost their IT spend – it’s clear that sector activity marches on,” said Andrew Kail, head of financial services at PwC.
“However, the financial services sector is at a crossroads. The way ahead is uncertain, particularly as Brexit negotiations are yet to be resolved. A co-ordinated action is now required by government, financial services firms and regulators to ensure the continued future success of the industry and its customers.”
Brexit may be one reason why, despite predicting a strong quarter ahead, firms were still pessimistic about the current business environment.
Optimism in the financial services sector fell slightly again in the quarter ending September, the sixth decline of the last seven quarters. This is the longest period of falling sentiment since the global financial crisis of 2008.
There was some split between different businesses, as banks and building societies were markedly less optimistic but finance houses, life insurers and investment managers were more optimistic than they had been in the previous three months.
“While demand in the sector is expected to hold up in the near-term, we can’t ignore the fact that optimism has dropped in almost every quarter for the past two years,” said Rain Newton-Smith, CBI chief economist. “With Brexit uncertainty affecting the wider economy, it’s vital that substantive progress is made during the next round of Brexit negotiations.”