Finance firms to keep hiring and investing despite lack of Brexit deal for the City

Finance firms to keep hiring and investing despite lack of Brexit deal for the City

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Britain’s financiers say they are nervous about the future – but are happy to hire and invest anywayCREDIT: TOLGA AKMEN/AFP

Bankers and financiers are ramping up plans to hire workers and invest in growth, despite concerns that the UK has not yet arranged a Brexit deal for the industry.

Employment edged down in the three months to September but the proportion of finance firms planning to increase their headcount in the coming quarter outweighed those planning to cut staff by a margin of 11pc. This is down on recent levels but still a solid expansion.

A net balance of 25pc want to spend more on training staff, matching the increase of the past three months, according to the Confederation of British Industry and PwC’s quarterly survey.

Investment in land and buildings is expected to turn positive, while a net balance of 68pc plan to increase IT spending.

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Business volumes are still growing. Source: CBI/PwC

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Net balance reporting growth in the past three months, %Business volumes are still growingSource: CBI/PwCTrends in business volumesJul ’14Jan ’15Jul ’15Jan ’16Jul ’16Jan ’17Jul ‘170204060Highcharts.com

Optimism overall is still on the downward trend established at the start of 2016. Uncertainty over future business conditions is now the most commonly cited factor that could limit future investment growth.

Changes to the legal and regulatory environment in particular have jumped up the list of potential risks to business volumes.

But profits and business volumes are still growing, raising hopes that the gloomy outlook has not actually weighed too heavily on business performance.

“It’s encouraging to see volumes and profitability continuing to expand for most financial services firms, with hiring expected to pick up and investment intentions improving,” said Rain Newton-Smith, the CBI’s chief economist.

“With Brexit uncertainty affecting the wider economy, it’s vital that substantive progress is made during the next round of Brexit negotiations, so that transitional arrangements can be agreed and businesses can make decisions now about investment and employment that will affect economic growth and jobs far into the future.”

[“Source-telegraph”]