Financial firms see slow growth in next quarter, study shows

11 January 2011

Rate of business growth in the financial services sector is to slow during the first three months of 2011 in comparison to the previous quarter, a new study has revealed.

Research by the Confederation of British Industry (CBI) showed that 50 per cent of respondents said that the rate of sales growth was up in the last three months of 2010 when compared with 23 per cent who said their volumes had fallen.

However, a 15 per cent rate of growth is expected during the first three months of 2011, the survey forecast.

The CBI’s study showed that there were more job cuts in the last quarter of 2010 that during any other three-month period for 17 years.

John Cridland, CBI director-general designate, said: "Activity in the financial services sector grew strongly over the second half of 2010. But firms see growth slowing over the coming three months, and expect another fairly moderate increase in profitability.

"Numbers employed have fallen significantly and investment plans have weakened since September. This probably reflects renewed cost control given little growth in incomes and slower growth in profitablity.

Further findings from the survey revealed that finance firms will need to spend more on adhering to regulatory compliance over the next 12 months.

By Jim Ottewill

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