Business volumes in the financial services sector dropped at a rapid pace in the three months to June, following a temporary recovery in Q1, according to the latest CBI survey on the sector.?
The quarterly poll also found that sentiment among FS firms fell, as profitability contracted at a steep rate over the period. Despite the weakness in business conditions, headcount in the sector rose for the first time since June 2024.?
Looking ahead, FS firms expect business volumes to decline at a slower, but still firm, pace next quarter.
Over the year ahead investment in IT is expected to improve to their strongest in nearly five years, but over half of firms cited inadequate net return as a likely factor to limit overall capex plans – the highest proportion since September 2022.??
Louise Hellem, CBI chief economist, said:? “The political transition underway must not slow delivery of the government’s financial services growth and competitiveness strategy at a time when activity has deteriorated and firms are facing a more uncertain outlook.
“Maintaining momentum on reforms – including continuing work with the FCA and PRA to deliver a more growth focused regulatory framework – will be essential to strengthening the UK’s competitiveness and supporting investment.
“The forthcoming Mansion House speech provides an important opportunity to boost confidence in the reform agenda by demonstrating progress already made and setting out clear next steps for delivery.”
#Financial #services #activity #dips #quarter #Daily #Business