Industry confidence on downward trend

24 March 2011 | By Chris Salih

Confidence among banking, finance and insurance professionals fell from +26.4 points to +18.8 points in the first quarter of 2011, according to the latest Grant Thornton UK business confidence monitor.

The figure is down from +32.4 points, recorded in the first quarter of 2010.

Despite the falls, confidence in the banking, finance and insurance sector remains above the UK average of +9.6 points for the first quarter.

The survey included 1,000 investment professionals and was carried out with the Institute of Chartered Accountants in England and Wales.

Grant Thornton head of financial services Peter Allen says: “The downward trend can be explained by general uncertainty as to how well the UK will exit the recession.”

Those working in the banking, finance and insurance industries reported an increase of 0.5 per cent in total salaries and 1.4 per cent in basic salary. This compares to a typical increase of 4 per cent before the recession.

Professionals expect increases in the rate of turnover and gross profits in the year ahead but say it will be well below the 8-10 per cent annual growth seen before the credit crunch.

Skerritt Consultants head of investments Andy Merricks says: “I am surprised the confidence index has fallen so sharply but maybe banking is part of the reason. There have been a lot of problems in that sector and there will be more bumps in the road.”

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