Financial firms to lead £200bn spending spree in the UK

FINANCIAL services firms are planning to splash out on staff and offices this summer, leading the way in an investment boom that will see the UK’s biggest businesses spend £200bn by the end of next year, according to two reports.

Research released this morning by Deloitte estimates that UK firms with sales of more than £1bn plan to spend £200bn by the end of 2015. Sixty-five per cent say their main focus for next year is investment, after returning cash to investors for the rest of 2014.

The latest survey of financial services companies by the Confederation of British Industry (CBI) and PwC also suggests firms are ready to spend again, with financial services particularly buoyant. The sector’s training costs are rising at the fastest rate in a decade, while banks are particularly positive about the next quarter, with the biggest rise in those planning to spend on land and buildings for the past seven years.

“A well-balanced recovery requires a significant rise in corporate investment and a shift away from consumer-led growth. This investment is much needed and with the OBR [Office for Budget Responsibility] also forecasting a 50 per cent increase in capital spending over the next five years, all the signs are that it is on its way,” said Deloitte’s UK chief executive David Sproul.

Entrepreneurs also seem to be benefitting from the more upbeat business outlook. A report from the Business Growth Fund and Barclays, also out this morning, says the number of middle-sized high-growth outfits is rising rapidly. In the last 12 months there was a 30 per cent surge in the number of firms with revenues of between £2.5m and £100m that have increased turnover by more than a third in three years.