Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

No-deal Brexit threat sends banking volumes in Britain to 28-year low

Stock Markets Sep 30, 2019 07:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Huw Jones

LONDON (Reuters) - The threat of a no-deal Brexit has sent profits and sentiment in Britain's financial services falling at their fastest pace since the global financial crash a decade ago, a CBI/PwC survey showed on Tuesday.

The latest quarterly survey by the CBI, a business trade body and consultants PwC, said that in the three months to Sept. 30, the level of business activity at banks fell at its fastest pace in 28 years.

Banking, insurance and investment funds bring in billions of pounds in tax revenues for the British economy, but direct access from London to its most important market, the European Union, could be blocked if there is a no-deal Brexit on October 31.

The quarterly survey of 83 firms found that optimism about overall business in financial services fell at the quickest pace since September 2008 when the Lehman Brothers crash deepened the 2007-2009 financial crisis.

The level of optimism has now been flat or falling for 15 consecutive quarters.

"The sector is the jewel in the crown of the UK’s world-leading services industry," said CBI Chief Economist, Rain Newton-Smith.

"While it’s encouraging that investment plans have improved, the threat of a ‘no deal’ Brexit is hitting confidence."

Britain has yet to secure a divorce settlement with Brussels, with only a month to go before it leaves the EU.

Financial firms in Britain have spent millions of pounds opening hubs in the EU to cope with whatever form Brexit takes.

Profits fell at their quickest pace since June 2009, but headcount in banking grew at the fastest pace in since December 2006, probably due to increased regulatory requirements, the survey showed.

Andrew Kail, PwC's head of financial services, said there has been a drop-off in plans to launch new products and services as firms batten down the hatches in expectation of a turbulent few months.

Looking ahead to the December quarter, business volumes are expected to fall further, the survey showed. For the coming year, new regulation, Brexit, IT spending and customers switching to rivals would hit business most.

No-deal Brexit threat sends banking volumes in Britain to 28-year low
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email