ACTIVITY in financial services firms over the past three months has increased at the fastest rate since September 2007, but market volatility meant that this growth was much slower than had been expected, the quarterly CBI/PwC Financial Services survey will show today.
In the second quarter, a net nine per cent of firms said that their business volumes rose. But they are highly optimistic about the summer period – a net 63 per cent expects a rise in volumes, the most positive since December 1993.
The financial services sector enjoyed its fourth consecutive quarter of improving profitability but the survey revealed that firms expect that to level off.
But concern about the impact of regulation and legislation on future business has stayed high, with 77 per cent of firms expecting to spend more on compliance over the coming year. John Cridland, deputy director-general of the CBI, said: “Many remain concerned that red tape will hamper growth prospects in the year ahead.”
Andrew Gray, UK financial services consulting leader at PwC, said: “The generally upbeat outlook for banks of growing revenues and profitability is being overshadowed by the looming threat of regulation on the sector. While banks may be confident in their own business models, they are unsettled by their operating environment.”