7th Jul 2025 03:00
(Alliance News) - Financial firms are expecting job losses to accelerate in the coming months, with demand worries weighing on investment plans and optimism levels hitting a fresh low, a new survey shows.
Activity across the sector fell in the three months to June, at the fastest rate since December 2023, according to the Confederation of British Industry.
It is the first time activity has decreased in more than a year.
Banks led the downturn with output dropping sharply over the latest quarter, and businesses bracing for a further slowdown over the coming months.
The survey also revealed that staffing across the financial services sector fell over the period – while firms are also expecting job losses to come at a more rapid pace over the next quarter.
It comes amid efforts among squeezed UK businesses to reduce costs – with the firms surveyed saying they anticipate profitability to improve modestly amid the staffing cuts.
Meanwhile, financial firms are expecting the level of investment to reduce in the year ahead – notably spending on land, buildings and vehicles, plants and machinery.
Concerns about the strength of demand was most commonly cited as the driver of weaker investment, while other firms indicated that the volatile economic climate, regulation, and tax measures in the autumn budget were weighing on spending plans.
The CBI, a membership organisation which represents large chains through to small businesses, surveyed 85 firms over the first two weeks of June.
The study found that optimism among financial services businesses fell in June at the fastest rate in nearly three years.
Wider economic uncertainty stemming from US tariffs and the impact on global trade and conflict in the Middle East has contributed to some businesses putting bigger investment decisions on hold, recent surveys have indicated.
Alpesh Paleja, the body's deputy chief economist, said "conditions deteriorated" across the sector, adding: "While activity is projected to stabilise next quarter, firms still expect to cut back on hiring and investment going forward."
He said that "firms facing continued economic uncertainty now will be looking ahead to the Chancellor's Mansion House speech and to the autumn budget for reassurances, particularly that the burden of potential tax rises doesn't fall squarely on their shoulders".
source: PA
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