Financial services firms 'expect tough quarter'

News Article - 23 May 2012
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New research has revealed that many UK financial services firms are expecting to see a drop in performance during the next three months.

According to a survey by the Confederation of British Industry (CBI) and PricewaterhouseCoopers, business volume growth increased at its fastest rate in seven years during the last quarter.

However, an increasing number of firms are predicting a slowdown in growth during the next three months as business volumes stay flat, incomes fall and more pressure is put on profits.

"This may yet turn out to be another temporary soft patch, similar to last September, but could be the first sign of the impact on financial markets of recent rises in global interest rates," commented Ian McCafferty, chief economic adviser for the CBI.

The Bank of England's monetary policy committee is set to make July's interest rate decision this week, with many analysts expecting the base rate to increase to 5.75 per cent in order to combat above-target inflation.

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