Page last updated at 07:23 GMT, Monday, 29 March 2010 08:23 UK

UK financial services set for faster growth, CBI says

Canary Wharf
Confidence among financial services firms is returning, survey says

The UK financial services sector is set to see faster growth in the next three months, after stagnating in the previous quarter, a report says.

The survey by the CBI business group found that confidence in the banking sector continued to recover.

"Activity in the financial services sector held steady in the last three months, and there are signs of better things to come," said the CBI.

However, concerns about red tape had reached an all-time high, the CBI said.

Asked how their business volumes fared in the three months to March, 43% of respondents said that volumes had risen and 42% said they had fallen. The CBI said this positive balance of 1% was better than expected.

In the next three months, a positive balance of 48% of firms expect a rise in business volumes, which is the best result since March 2006 when the balance was 58%.

Ian McCafferty, the CBI's economic adviser, said: "Financial services companies hope lending will grow across their customer base over the coming quarter, lifting business volumes and helping profitability."

However, the CBI's survey found that 74% of firms were worried about how regulation would hit their growth prospects over the coming year.

In addition, 85% of the companies polled fear the UK is losing its competitiveness as a financial centre.

London has come through the 2008 banking crisis, but the sector is now facing greater regulation to prevent a repeat of the financial meltdown and the threat of economic power moving to Asia.

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