The financial services sector is thought to have shed 10,000 jobs in the three months to June despite strong growth in business volumes, the CBI employers’ group and PwC have reported.
The industry expects to create 1,000 jobs in the next quarter, according to the latest survey of 94 companies by the CBI and PwC, the professional services firm. Finance and insurance employ 1.1m across the UK and have lost 63,000 jobs since 2008.
Business volumes and optimism grew across most of the industry in the second quarter, but life insurance was the exception. It saw volumes shrink and optimism fall.
Stephen Gifford, CBI director of economics, said: “Despite a fall in average costs, profitability has been dented by stagnant fees, commissions and premiums. But with business volumes continuing to grow and costs predicted to fall again, profits should rebound next quarter.”
He said the need to respond to regulation would continue to eat into investment budgets and constrain business expansion for some time to come.
“Firms are learning to manage relationships with two new regulators; banks are grappling with structural reforms and fresh capital requirements; and the Parliamentary Commission on Banking has proposed substantial changes on governance and internal controls,” he said.
Chosen excerpts by Job Market Monitor