The Confederation of British Industry (CBI) believes confidence among financial services companies is at its highest level since last summer, with volumes of business also on the up.
The news came as part of the quarterly financial services survey, conducted by the CBI and consultancy PricewaterhouseCoopers (PWC).
John Hitchins, UK banking leader at PWC, said: ‘Industry fears of a housing market collapse and a wider downturn expressed in the last survey have not materialised. However, the continued pressure on jobs and worries about the level of demand indicate that growth in confidence is still fragile.’
The CBI will be watching the Monetary Policy Committee closely, and Ian MacCafferty, chief economist at the CBI, said: ‘It is too early to celebrate, but with business still below normal and companies concerned about the year ahead an interest rate cut would help secure these early indications of recovery.’
The survey also pointed to difficult times for lenders and highlighted falling business volumes, but increased staffing levels at building societies.
John Goodfellow, chief executive of Skipton Building Society and chairman of the Building Societies Association, said: ‘I would be amazed if they were saying that banks were improving in terms of volumes and building societies are not, it does not add up. It looks stupid that here are societies hiring people but doing less business. I would treat everything in this survey with a degree of cautious scepticism.’