Business ‘almost back to normal’ according to UK financial firms

News Article - 08 April 2011
Category: Business

The nation's financial firms are indicating that UK business is 'almost back to normal' for the first time since the global recession.

Employers' organisation the CBI have revealed business activity has increased 27-28 per cent in the three months to March - the biggest rise since September 2007.

The CBI's latest survey reveals 30 per cent of UK firms predict business to improve further in Q2 2011, although there remain plenty of financial hurdles to overcome for businesses to return to 'normal'.

Andrew Gray, PwC's head of UK banking, said: "Despite a strong round of annual results, [banks] are increasingly realistic about the challenges ahead.

"While they report near normal business levels for the first time since 2007, their actual activity is way below that seen before the financial crisis. Income levels and business volumes are stubbornly flat."

The best performers in Q1 2011 were businesses dealing with private customers with many banks still reporting weak growth levels despite improved profitability thanks to stronger margins.

Employment levels in the financial sector continue to decline. The job market is becoming increasingly competitive due to redundancy cuts across the country and a steady flow of graduates looking for work. This poses an issue for human resource departments up and down the country, who seek to control the surge in applications; this can be addressed somewhat by using state-of-the-art HR software.

Within the financial sector, retail banks have come under intense scrutiny following a Commons Treasury committee report, which concluded that High Street banks were not competitive enough. Consumers and small businesses are said to be hamstrung by a lack of transparency between current accounts and difficulties when switching providers.

As a result the Government is being called upon to tackle the big banks who remain too dominant in retail and business banking, by prioritising competition and transparency.

The financial focus for small businesses has too often been on the availability of credit rather than providing good customer service that can be even more important for developing SMEs.

Article keywords: CBI, UK economy, Andrew Gray, PwC, UK banking, financial sector, HR software, Commons Treasury committee report, SME

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