Sentiment in UK finance falls at fastest pace since 2019, survey finds

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LONDON, Oct 13 (Reuters) – Britain needs to restore financial stability to help reverse the fastest decline in financial sector sentiment in three years, according to a survey by CBI and consultancy firm on Thursday. PwC.

Profitability growth in the sector remains robust and is expected to increase at a faster pace from October to December, according to the CBI/PwC survey.

But sentiment in the third quarter of September fell at its fastest pace since September 2019, when it was hit by uncertainty surrounding Brexit negotiations, the survey found.

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It was completed on September 23, the day Britain’s Finance Minister Kwasi Kwarteng outlined plans for tax cuts and steep increases in borrowing, sending the pound and government bonds into a tailspin.

“While activity in the financial sector appears to be in a good position, with profitability and volume growth remaining strong, the rapid fall in sentiment and lackluster investment intentions illustrate the difficult conditions in which companies are struggling. find,” said CBI chief economist Rain Newton-Smith. said.

“Recent market volatility resulting from the government’s ‘mini’ budget – alongside other global developments – underscores the clear need to restore macro stability and bolster business confidence,” Newton-Smith said.

Employment in the sector is expected to decline at a faster pace in the current quarter, perhaps reflecting weaker sentiment, while the value of downgraded bank loans is expected to rise slightly, according to the survey.

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Reporting by Huw Jones Editing by Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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