U.K. CBI Raises Outlook for Financial Services, Says Banking Remains Under Pressure

The Q2 CBI U.K. financial services survey showed some signs of optimism returning to the sector. The CBI reported that “many parts of the UK’s financial services sector expect business volumes to rise in the next quarter after 21 months of falls, while optimism about the overall business situation has risen for the first time in two years. But banking remains under pressure”. Twenty two percent of survey respondents reported business volumes rising in the last quarter, while 50% said it fell, giving a -28% balance. “Looking ahead to the next three months, firms are the most upbeat since March 2007 on business volumes with 29% expecting a rise and 18% anticipating a drop, giving a balance of +11%.” The CBI survey is hence displaying some encouraging signs for U.K.'s financial services sector. Meanwhile, we expect this month’s services PMI reading (Friday) to show continued expansion for the services industry.