Survey Paints Gloomy Picture For UK Financial Services Sector

by Carla Johnson, Investors Offshore.com

09 January 2002

A report released on Monday by the Confederation of British Industry (CBI), and PricewaterhouseCoopers has painted a grim picture of the future for the financial services sector in the United Kingdom.

According to the quarterly survey results, 42% of the 129 banks, insurers, fund managers, and stockbrokers questioned revealed that business volumes fell substantially during the last three months of 2001, and said that they expected to continue cutting staff and reducing future investment. This, says the CBI, is the worst result since December 1992.

'These industry trends were in place but the aftermath of the September 11 attacks has just exacerbated them,' explained Financial Services partner at PwC, John Hitchens.

According to the report, banks, fund managers, and stockbrokers were among the worst hit in 2001, with 35% of banks reporting that current levels of business have fallen. However, although an astounding 77% of UK stockbrokers revealed that business levels are down, over a third were optimistic for the New Year, and expected trading volumes to rise in the January to March period.

The study also showed an increase in the number of financial services firms blaming regulation for constraining future growth, since the introduction of new powers for the Financial Services Authority in December of last year.

Recommended