Optimism dropped for the third consecutive quarter in the three months to September, according to the research jointly produced by the CBI business lobby group and the accountancy firm PwC.
It marked the longest run of deteriorating sentiment since the first quarter of 2009, when the global financial system was in the midst of a deep and prolonged crisis.
The biggest drop in confidence was among finance houses, building societies and investment managers, and less so among banks. Optimism was broadly stable among life and general insurance providers.
When asked to list their main concerns over Brexit, financial firms cited the top three risks as a negative impact on the economy, changes in access to EU markets and the prospect of lower yields.
Andrew Kail, the head of UK financial services at PwC, said the continuing fall in confidence was a cause for concern, adding that businesses were considering moving their operations out of Britain because of the vote and uncertainty over future trading agreements. [...]
Kail said there was a danger Britain’s standing as a major financial hub might be damaged. “Two million people across the UK are directly or indirectly employed by the financial services sector.”
He said prolonged low interest rates, as well as complexities caused by changing regulations and technology, were all challenges facing the sector. “Brexit has added an additional ingredient to the mixture.” [...]
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