The financial services sector will record higher growth in the next three months, after a flat quarter, according to senior executives polled by Britain's biggest business lobby.
The Confederation of British Industry (CBI) also said that fears over regulation had reached an all time high, with companies expecting a sharp hike in their spending on compliance over the next year.
Business volumes, which fell for banks and security traders during the three months to March, are expected to increase in the coming quarter, while building societies and life insurers reported strong growth in the three months gone.
Overall confidence in the banking sector is continuing to rise, with profitability remaining steady in the sector, the group said.
“Activity in the financial services sector held steady in the last three months, and there are signs of better things to come. However, the picture remains mixed,” said Ian McCafferty, CBI's chief economic adviser.
“Financial services companies hope lending will grow across their customer base over the coming quarter, lifting business volumes and helping profitability,” he added.
According to the poll, a record-high 74% of companies said they were concerned about the impact of statutory legislation and regulation on their ability to grow in the next 12 months.
In addition, 85% of the companies polled fear the UK is losing its competitiveness as a financial center.
London has come through the 2008 banking crisis facing the threat of economic power moving to Asia and greater regulation to prevent a repeat of the financial meltdown. (Reuters)