The UK financial services sector is seeing only green, while practically all other industries are struggling to stay alive. The Confederation of British Industry (CBI) is expected to make an announcement today regarding the health of the financial services sector as just fine and that they are beating the odds when compared to most other companies during this recession and subsequent recovery.
The financial services sector has not seen this much activity since June of 2007 and it appears that profit numbers are positive for the fifth quarter in a row. With this much activity occurring, the CBI is still planning on reporting the industry is not growing as fast as was expected.
At one time the industry was in fear of regulatory reform. The fear reached its peak during the middle of the credit crisis. Now, the CBI has discovered that many within the city, as well as others in the financial services industry, fear an economic downturn more than anything.
Ian McCafferty, CBI’s chief economic advisor, discussed growth within the financial services industry and profitability, saying: “Activity picked up in the financial services sector in the last three months at a pace not seen since before the credit crunch – although this growth was slower than hoped, it did help firms’ profitability to rise further.
“There is ongoing concern that prospective regulation may hold back business expansion in the coming year, but financial services firms have become more worried that weak levels of demand will dampen growth prospects.”
As with individuals attempting to get loans, credit availability continues to be an issue within the industry.