Financial services firms expected to make job cuts in Q4

Financial services firms are expected to reduce headcount by 11 per cent in the next three months due to a slow-growth environment, according to the latest CBI/PwC Financial Services Survey.

The pace of growth in the UK financial services sector continued to slow in the three months to September. Firms expect growth will be slower in the final quarter of 2011 and, for the first time in two years, say there will be no improvement in profitability.

Firms expect the pace of growth to slacken in the coming quarter, with business volumes expected to ease by 5 per cent and profitability to flatten out.

Of the 84 financial services firms surveyed, 33 per cent saw business volumes rise in the quarter to September and 24 per cent reported a fall.

34 per cent of firms reported a rise in profitability and 18 per cent recorded a fall. Sentiment has fallen for the first time since March 2009, as firms anticipate more challenging conditions. Around 20 per cent firms are less optimistic than three months ago.