Survey Reveals Sustained Boost In Confidence In UK Financial Sector

by Carla Johnson, Investors-Offshore.com

16 October 2003

Confidence amongst the UK's financial service sector companies has risen faster in the last quarter than at any time since 1999, according to the latest survey by PricewaterhouseCoopers and the Confederation of British Industry.

The results show that 44% of businesses expressed an optimistic outlook within their sector compared to three months ago, whilst only 7% were less optimistic. In the previous quarter, the balance between optimists and pessimists was just 7%.

"This latest survey shows an encouraging rise in both confidence and business volumes, and all the sectors most closely exposed to the stock market have reported a growth in business with private individuals. The return of private investors to the market is an important signal of recovery," observed John Hitchins, UK banking leader at PricewaterhouseCoopers.

Meanwhile, Chief CBI Economist Ian McCafferty said that a second successive positive survey suggested that a firm recovery in the financial services industry was now taking hold. "That reflects the continuing stock market recovery and the improved outlook for the global economy," said Mr McCafferty. "The first expected increase in financial services employment for more than two years and the end of the downward slide in expected IT investment are further indications that a real turnaround is underway," he added.

The survey revealed that business volumes were higher in the third quarter in almost every sector of the financial services industry apart from insurance, and that confidence was highest amongst fund managers, life insurers and securities traders. Insurance broking was the only sector in which confidence fell.

The survey also revealed significant growth in financial services conducted on the internet, which has increased at the fastest rate since the activity was first recorded in 2000.

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