Gloom spreads across financial services

Of the 133 companies surveyed by the Confederation of British Industry and PricewaterhouseCoopers almost half of them said they were less optimistic about the business environment then they were three months ago. Less than a tenth felt the future would be brighter for business.

Worryingly, the majority of these companies were surveyed before the 11 September attacks in America, and included a large number of insurance companies.

Looking ahead at the next three months to year-end the balance of financial services companies expressed negative sentiments about both business volumes and the value of fee income and commissions, pointing to an overall drop in business levels and activity.

Sudhir Junanker, the CBI’s associate director of economic analysis, said business confidence had been suffering even before the attacks.

‘It is significant’, he added, ‘that financial service companies are markedly more concerned about future demand than they have been at any time in the last five years.’

PwC’s financial services partner John Hitchins said: ‘With business confidence at a three year low and worries that consumer confidence may be eroded in the wake of the terrorist strikes on America, the UK financial services industry is distinctly nervous.’

The survey also spelled out poor prospects for job-hunters. The majority of companies expect staff numbers to decline now, while an even greater majority expect things to worsen by the end of the year.

This is born out by the most recent staff cuts at leading financial institutions in the City. Today investment banking giant Credit Suisse First Boston became the latest global player to feel the pinch.

The bank said it was letting go of 2,000 of its staff after revenues fell by 20% in the last quarter.

Earlier this month PwC said it was closing three regional offices in the Midlands following the axing of 78 graduate contracts in August.

Fellow Big Five rivals Ernst & Young slashed 200 jobs in September, while in August management consultancy Accenture told 400 graduates to stay at home due to lack of work.


Survey points to flood of job cuts

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