Business levels at UK financial services firms fell at their fastest rate in almost 17 years during the last three months of 2007, says the CBI.
A sign that the global credit crunch has started to bite, the fall marked the end of a two-year run of continuing growth, the business organisation said.
A total of 44% companies surveyed said business volumes had fallen during the quarter. Just 10% reported a rise.
The financial services sector includes banks, insurance firms and brokerages.
'Clear turnaround'
The level of business volumes is now its lowest since March 1991, said the CBI, which conducted the survey in association with accountancy giant PricewaterhouseCoopers.
"The credit squeeze has delivered a sharp shock to business volumes over the past three months, and it seems that difficulties are likely to persist for some time yet"
It also found that business sentiment continued to worsen, with 49% of companies now saying they felt less optimistic than they did in September.
Further, firms reported that income from interest, investment and trading fell at its fastest rate since the survey began in 1989.
"After two years of strong growth there has been a clear turnaround within the financial services sector," said Ian McCafferty, CBI chief economic adviser.
"The credit squeeze has delivered a sharp shock to business volumes over the past three months, and it seems that difficulties are likely to persist for some time yet."
However, Mr McCafferty added that the sector remained "very resilient", and that "profitability, job creation and investment plans are all still positive."
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