10 Jan 2025
A survey carried out by the Confederation of British Industry (CBI) has revealed that optimism in the UK financial services sector fell at its quickest pace since September 2022.
The survey showed that optimism fell to -28% in December 2024 from -13% in September.
The business group warned that the Autumn Budget measures are looming over firms' investment plans. Around two thirds of the businesses polled reported that factors mainly linked to the cost of the implications arising from the Autumn Budget measures are likely to 'limit' investment over the next 12 months.
Louise Hellem, Chief Economist at the CBI, said: 'Financial services firms faced a challenging end to 2024, marked by a record-fast decline in spreads and the quickest increase in non-performing loans over three years.
'These adverse conditions contributed to a fall in both profits and optimism, despite a pick-up in business volumes growth. The survey also highlighted widespread concerns among firms about the potential drag on investment from rising costs following the Autumn Budget.
'With much global uncertainty, low fiscal headroom and an urgent need to inject momentum into the economy, delivering a comprehensive financial services strategy and implementing the Mansion House reforms in full is vital to achieving the UK's growth ambitions.'