Financial services firms hit by shock contraction in business

Ben Southwood
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ACTIVITY in the financial services sector slumped in the three months to September, according to survey data released today.

Forty-nine per cent of respondents to a survey, jointly carried out by PwC and the Confederation of British Industry (CBI), said that their business volumes fell – compared to just 30 per cent who said they rose.

This net balance of minus 19 per cent is the first negative score since June 2009, when the balance hit minus 28 per cent.

“The financial services sector has faced a tough quarter,” said Matthew Fell, CBI director for competitive markets, “with sales volumes unexpectedly falling and average costs rising – thus denting profits.”

However, a balance of 12 per cent of firms expect a return to growth in the coming quarter, despite the burden of statutory legislation and regulation: A balance of 76 per cent planned to spend more on compliance in the coming three months.