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CBI survey shows rise in business volumes

Business volumes in UK financial services firms grew for the first time in two years, according to a survey from the Confederation of British Industry and PricewaterhouseCoopers.

The latest financial services survey found that 32 per cent of firms saw business volumes rise in the third quarter while 24 per cent saw a fall in volumes. Overall, volumes grew by 7 per cent.

It is the first time in two years that more respondents have reported a rise in business volumes than a decline.

Securities traders and investment managers have seen strong volume growth over the past quarter and banks and building societies anticipate growth to resume over the next three months.

But life insurers, insurers and insurance brokers expect further, albeit far slower, falls in business volumes.

Business sentiment has improved, with 36 per cent of firms more optimistic about the general business situation than in June, the most positive figure recorded since March 2004.

However, the CBI has also warned that as many as 60,000 UK financial jobs may be cut this year, with the volume of job losses almost doubling losses in the sector last year. The survey says the job loss rate is expected to ease again in the next quarter for the sector but this would still mark two solid years of falling employment.

Chief economic adviser Ian McCafferty says: “Business volumes have increased for the first time since the credit crunch and a fall in running costs helped lift profitability. This is concrete evidence of the gradual path to recovery that firms were anticipating in our June survey.

“Future demand is still a major concern for financial services firms, however, and further pain will be felt in job losses and lower investment.”

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