Confidence among UK financial services has increased for the remainder of 2023. This is despite a dip in activity during Q3, according to new survey from the CBI.
The CBI’s financial services survey found a balance of financial services firms reporting a rise in output versus a fall was 27%.
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Though down from 42% the quarter before, this was significantly higher than the long-run average of 13%.
The survey showed that looking forward, 41% of firms projected business volumes to pick up over the next quarter.
Louise Hellem, CBI chief economist said: “It’s great to see financial services firms reporting another positive quarter. Optimism and volumes growth are both firm, and activity is expected to pick up further in the months ahead.”
Hellem added that the sector could record a stronger quarter if the government is able to improve the sector’s regulation in its Autumn Statement.
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By GlobalDataUK role as a global financial hub
Khalid Talukder, Co-Founder of DKK Partners, said: “It is great to see the financial services sector set a positive standard for businesses across the UK, remaining confident despite the turbulent times experienced over the last few years. The UK acts as a global financial hub. It is vital that the industry remains strong in order to continue attracting overseas investment while supporting the growth of international relations.”
“The priority should be new regulations to reduce barriers, capitalising upon post-Brexit freedoms with the aim of providing the financial services increased opportunities in the future to focus on areas such as investment, which UK businesses so desperately need. As we attempt to solidify our position as a financial hub and leader in technology, our financial services sector must remain robust as changes are implemented, allowing businesses to gain the support they need to grow the economy and allow the UK to remain a global powerhouse.”
Edinburgh Reforms: unlock investment, turbocharge growth
The sector is hopeful on the government’s consulting on a package of proposals, including the Edinburgh Reforms, to boost growth.
Jeremy Hunt’s Edinburgh Reforms were initially announced in December 2022. They were designed to “unlock investment and turbocharge growth” by revoking “burdensome pieces of retained EU law”.
Ram Gopal, Director of Gillmore Centre for Financial Technology at WBS, said: “Seeing financial firms project optimism for the rest of the year helps accelerate confidence in the UK economy across the board as the financial sector acts as a significant backbone, and sustains the UK’s dreams of being a leading financial hub.
Research centres can also add to this, enhancing the R&D necessary to aid the financial sector in the output, and also bettering services for consumers.”
