LONDON (AFX-UK) - Business confidence in the UK financial services sector remained stable in the fourth quarter of 2000, according to a survey by the Confederation of British Industry and PriceWaterhouseCoopers. According to the survey, a positive balance of 2 pct of companies were more optimistic than three months ago, down from a balance of plus 3 pct in September, and down on a positive balance of 21 pct in the fourth quarter of 1999. It further noted that the financial services sector has seen a surprisingly strong rise in business volumes in the last quarter, with business volumes rising at the fastest rate since March 2000. According to the survey, 45 pct of firms said business volumes were up, while 15 pct said they were down. The resulting balance of +30 pct compares with a balance of +13 pct in September and +52 pct at the same time a year ago. However, profitability rose at a much slower rate than was either reported or expected in the last survey, it said. There was significant variation across the sectors, with general insurance reporting strong growth and securities houses reporting a sharp fall. It further noted that most sectors now expect a fall over the coming three months, consistent with the squeeze on margins. Firms said employment grew modestly and expect a further small increase in the first quarter of 2001, with declines in bank and building societies to be offset by growth in general and life insurance and fund management. Sudhir Junankar, CBI associate director of economic analysis, said: "Financial service firms were surprised by the buoyancy of business volumes, but they expect this to ease in the early part of this year. With profits set to come under pressure, business confidence is just holding steady."