THE UK financial services sector has achieved faster growth in business volumes in the first quarter than it had expected but expansion is projected to slow over the coming three months, a survey shows.
The Confederation of British Industry and accountancy firm PricewaterhouseCoopers, publishing their latest quarterly survey of the sector, say the forecast slowdown in growth suggests “firms remain cautious over the outlook”.
Profit growth was robust in the first quarter, the survey signalled. However, firms expect profitability will improve more moderately in the coming three months.
The survey signalled sentiment in the UK financial services sector has stabilised in the three months to March, having deteriorated sharply throughout 2016. Sentiment was unchanged in the banking sector, but the CBI and PwC noted this followed four consecutive quarters of decline.
Building societies, life insurers, insurance brokers and investment managers felt more optimistic than in the previous quarter, the survey showed. However, finance houses and general insurers were less confident.
Andrew Kail, PwC’s head of financial services, said: “The survey shows that sentiment has now stabilised among firms, but clearly the economic and political backdrop is affecting how companies feel about the future.”
He added: “With the triggering of Article 50 just days away, the UK’s financial services industry will have to start activating contingency plans to deal with life outside membership of the European Union. As negotiations begin and transitional arrangements emerge, these plans will need to adapt to ensure companies respond to protect and evolve business models.”
The survey signalled a slight acceleration in employment growth in the UK financial services sector in the first quarter. A stronger increase is projected in the coming three months.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here