Signs of recovery

The City

A new survey has revealed that financial services firms in the UK may be recovering, with business volumes expanding for the first time in over two years.

In fact, according to a new report from PricewaterhouseCoopers (PwC) and business organisation the CBI, in the three months to early September, those financial firms surveyed saw business increase by seven percent.

By contrast, the study also highlights that UK building societies experienced "downbeat" business levels, which has led to analysts predicted that the recovery still has a considerable way to go. As such, suggest the researchers, "future demand is still a major concern."

There is, however, considerable good news, with the PwC report revealing that 36 percent of respondents are now feeling significantly more optimistic about the general business situation than in June, four months previously.

In fact, as Andrew Gray, head of financial services consulting at PwC told the BBC, "For the first time since June 2007, banks are experiencing an upswing in confidence."

He added, "Confidence is, in part, offset by concerns of further impairments and the impact of 'tougher' regulation."

The call for tougher regulation has been a major focus for banking authorities in recent weeks, with the recent G20 Summit in Pittsburgh, America, resulting in world leaders agreeing on new policies pertaining to bankers' bonuses, in addition to reports that suggest stronger rules on overall banking are likely to follow.

However, whether or not the signs of recovery are a clear indicator of things to come remains unclear, with most analysts sticking by the prediction that economic recovery still has someway to go before "recovery" is really a word on everybody's lips.

Nonetheless, CBI chief economic adviser Ian McCafferty says: “"Business volumes have increased for the first time since the onset of the credit crunch, and a fall in running costs helped lift profitability."

He adds: "While this is concrete evidence of the gradual path to recovery, future demand has to remain a major concern for financial services firms, and further pain will continue to be felt in job losses and lower investment."

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