–CBI: Net 27% UK Financial Firms’ Business Up Q4 vs 28% Q3
–CBI: Q4 Financial Sector Business Optimism +16 vs +8 in Q3
–CBI Net 40% UK Financial Firms Q4 Business Volumes Sub-Normal
–CBI: Net 48% UK Financial Firms Cut Employment in Q4

LONDON (MNI) – The UK financial service sector saw robust business
volume growth in the fourth quarter but still shed jobs at the fastest
rate for 17 years, according to a survey from the CBI/PwC.

A net 27% of financial sector firms reported business volumes were
up in the fourth quarter, little changed from the net 28% who reported a
rise in volumes in Q3. This pick-up in business, however, was
accompanied by widespread job cutting.

A net 48% of financial sector firm reduced employment levels in the
fourth quarter, which the CBI said was the largest such reduction for 17
years.

In all, 50% of respondents reported business volumes were up in the
fourth quater and 23% said they were down, giving the 27% growth
balance. Looking forward the pace of growth is expected to ease with a
net 15% expecting business volumes to rise in the first quater of 2011.

The CBI/PwC found business volumes rose in all financial service
sectors excluding banking, where business was flat. Sentiment improved,
with the business optimism balance up at 16 from 8 in the third quarter.

The reduction in staffing levels will add to fears over rising UK
jobless levels going forward. The most recent official data showed he
unemployment rate for the three months through October rose 0.1
percentage point to 7.9%, the first quarterly rise since April.

John Cridland, CBI Director-General Designate, said:

“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.”
John Cridland, CBI Director-General Designate said.

“Numbers employed have fallen significantly and investment plans
have weakened since September. This probably reflects renewed cost
control given little growth in incomes and slower growth in
profitablity,” Cridland added.

The balance of financial sector firms reporting a rise in fee,
commission or premium income in Q4 was just 3%, and a net 10% reported a
fall in the value of net interest, investment or trading income.

–London newsroom: 4420 7862 7491; e-mail: drobinson@marketnews.com

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