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Financial services activity grows for second consecutive quarter

John Cridland

Financial service sector activity grew for the second quarter in a row in the three months to December, a joint survey from the Confederation of British Industry and PricewaterhouseCoopers has revealed.

When asked how business volumes fared in the three months to December, 50 per cent said volumes had increased and 23 per cent said they fell.

The resulting balance – the difference between those reporting an increase and those reporting a decrease – of 27 per cent is in line with firms’ expectations – 24 per cent. The survey says a slower rate of growth is expected in the next three months.

Business volumes grew for all sub-sectors of financial services in the past quarter, apart from banking, where volumes were flat. Life insurers saw a year of growth in business volumes and profitability for 2010. For investment managers, all respondents saw activity grow in the past three months.

The number of people employed in the sector fell at the fastest pace for 17 years, according to the survey. The quarter’s balance of -48 per cent was worse than the -20 per cent expected.

CBI director-general designate John Cridland (pictured) says: “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.”

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