LONDON (AFX-UK) - Business confidence in the UK financial services sector has stabilised though volumes have not risen, according to the latest survey of the sector from the Confederation of British Industry and leading accountancy firm PriceWaterhouseCoopers.
According to the survey, a positive balance of 25 pct of companies were more optimistic than three months ago, up from a balance of plus 22 pct in March, and is the same as recorded in September and December 2000.
According to John Hitchins, financial services partner at PriceWaterhouse Coopers, business confidence of financial services firms stabilised this quarter as a reflection of less turbulence in the market rather than an improvement in underlying fundamentals. "Control of costs is a problem across almost the whole sector and the survey shows a slowdown in investment intentions, particularly in IT," he said.
The IT investment intentions have weakened since March. They are still positive but at the lowest level since December 1996. Sudhir Junankar, CBI Associate Director of Economic Analysis, said business confidence had levelled off after the downturn in the last survey but that he does not expect the pause in the growth of business volumes to continue.
He added however, that financial services companies seemed less confident about longer term business prospects, with concerns about likely demand conditions at their highest levels for almost three years.