Finance firms unsure about summer

24-08-2006

Financial firms in the UK are less optimistic about the next quarter than the three months that have just passed, according to the latest survey.

The quarterly Financial Services Survey produced in partnership between the Confederation of British Industry (CBI) and PricewaterhouseCoopers found that in the three months to June a balance of 44 per cent more companies reported a rise in business volume.

But in comparison a balance of just four per cent expect business volumes to again increase over the next quarter.

This is despite positive balances of 28 per cent and 23 per cent with regards to rising profits and trading income since the beginning of April.

However, even though the balance of firms expecting profits to continue to increase until the autumn has been cut to five per cent, analysts still believe that overall, long-term confidence remains on the ascendancy.

Doug Godden, head of economic analysis at the CBI, said: "The financial services industry has continued to thrive recently, but now expects some tougher times in the next few months, in the wake of renewed doubts about the global economy and stock market uncertainty."

But Mr Godden asserted that continuing high levels of employment and burgeoning investment opportunities meant the overall picture remained encouraging.

This view is echoed by John Hitchins, leader of UK banking at PricewaterhouseCoopers, who points to the fact that a balance of plus 41 per cent of financial firms intend to increase their marketing and advertising revenues.

John Hitchins, leader of UK banking at PricewaterhouseCoopers, said: "The balance of optimism may have shifted, but this has been the financial sector's fourth consecutive quarter of strong expansion at a time when the picture in the rest of the UK economy has been patchy," he explained.

The CBI represents almost 250,000 UK businesses, which employ about one-third of the country's workforce.


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