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As financial services slows...

Activity in Scotland continues to grow despite Brexit

Wireline industryBusiness activity continues to grow in Scotland, despite continuing uncertainty over Brexit and anecdotal evidence of a slowdown. 

The first quarter Scottish Business Monitor compiled by the Fraser of Allander Institute shows staff availability remains a pressing issue for most firms and one in four have reduced investment.

Professor Graeme Roy, director at the FAI, said: “Scottish businesses appear to be remaining relatively resilient to the ongoing political uncertainty. This chimes with last week’s GDP data, which showed sustained, if historically weak, growth.

A separate survey of the UK economy shows that sentiment and volumes are deteriorating sharply in the financial services sector, with various indicators at their lowest since the financial crisis of 2008.

The CBI/PwC Financial Services Survey of 84 firms found that optimism about the overall business situation plunged sharply, falling at the quickest pace since December 2008. Optimism has now been flat or falling for over three years.

Business volumes fell for a second consecutive quarter, and at the fastest pace since September 2012. Conditions varied across financial services sectors, with the greatest drag on growth coming from the investment management sector, where volumes fell at the fastest pace since December 2008.

There were some positive signs in the survey. With cost pressures easing, profits in the sector as a whole saw their strongest growth in a year, driven by the banking and insurance sector. Profitability is expected to pick-up further over the three months ahead.

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