01/09/2024 | Press release | Distributed by Public on 01/08/2024 18:09
The fourth quarter of 2023 saw financial services business volumes contract for the first time since June 2020, according to the latest CBI Financial Services Survey. Volumes are expected to be broadly flat over the next three months.
The quarterly survey, conducted between 21 November and 15 December, also showed that optimism and profitability were both flat across the quarter, with profitability set to fall in the three months to March. Headcount growth accelerated over the quarter and is expected to remain quick in the months ahead.
There was a mixed picture for investment intentions, with firms expecting to increase investment in IT and vehicles, plant & machinery, while cutting back on capital expenditure in land & buildings. Notably, this was the first survey since December 2014 in which FS firms expect to increase investment in vehicles, plant & machinery.
Key findings:
Louise Hellem, CBI Chief Economist said:
"With business volumes falling and both sentiment and profitability stagnating, 2023 ended on a flat note for financial services firms. However, it is encouraging to see that many businesses are still looking to grow their workforce and increase investment going forward.
"With the Chancellor having answered the call to make full expensing a permanent feature of the UK's tax regime, it's pleasing to see greater confidence among prospective investors in these areas. At the Spring Budget, the Government should provide an update on the green finance strategy so that the financial services sector can continue to play its part on the road to net zero."