Challenges 'growing'

Optimism in finance slips to 2009 lows

Standard LifeOptimism in the financial services sector has fallen for the third consecutive quarter, the longest period of declining sentiment since the depths of the financial crisis in early 2009.

The CBI/PwC quarterly survey found that just over half of all financial services firms said the general impact of the Brexit vote was negative and only one in ten firms were positive. The main cause for concern was market volatility.

Rain Newton-Smith, CBI chief economist, said:Challenges facing the sector have not gone away – they’ve actually grown.

“Add the uncertainty caused by Brexit to low interest rates, technological change and strong competition, and it’s plain to see why optimism is falling and pressure on margins remains intense.

“With firms voicing strong concerns about the impact of Brexit, especially the risks to the wider economy in the years ahead, the Government must allay their unease with clear plans for negotiations to leave the EU. An ambitious Autumn Statement would also set a clear direction for growth and prosperity.”

Andrew Kail, UK financial services leader at PwC, said: “Life was busy for UK financial services firms before the Brexit vote – it just got a whole lot busier as they digest the implications for their businesses.

“The survey shows business performance holding up in the short term which is positive. However, the continuing fall in optimism is a cause for concern. Trading conditions and the ‘lower for longer’ interest rate environment continue to be challenging. “

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