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UK financial sector optimism falls as bosses brace for economic slowdown

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LONDON, ENGLAND - MARCH 12: The view east from the Sky Garden terrace at 20 Fenchurch Street takes in Canary Wharf on March 12, 2015 in London, England. Number 20 Fenchurch Street is London's newest skyscraper, known locally as The Walkie Talkie. The Sky Garden sits at the top of the 160 metre, 500 million GBP building and is now open to the public. (Photo by Peter Macdiarmid/Getty Images)

The majority of top executives at UK financial institutions are less optimistic about the country’s economic outlook than they were a year ago.

Almost 60 per cent of organisations said they expected UK economic growth to slow in the next 12 months, roughly twice as many as held that view last year, according to a survey published today by Lloyds Bank.

Read more: Salaries for new roles jump despite economic uncertainty

Two-thirds of companies surveyed said they expected domestic growth in the coming year to be weaker than in other G7 countries, in a stark indicator of faltering confidence.

The gloomy outlook was reflected in attitudes towards the financial services sector, with 55 per cent forecasting that growth would deteriorate in the year ahead, up from 27 per cent in 2018.

Despite these concerns, 40 per cent of firms said they expected their own revenue to increase over the next year. However, this figure was down from 64 per cent in 2018.

“Against a backdrop of ongoing global economic turbulence, it is unsurprising that sentiment among financial institutions towards the sector and the wider economy is lower than in previous years,” said Robina Barker Bennett, head of financial institutions at Lloyds.

“That said, the responses to this survey show the sector’s resilience during difficult times and it is especially encouraging to see that firms plan to continue investing in the UK.”

While the survey laid bare the impact of uncertainty in the run up to Brexit, it revealed more than half of firms feel they are prepared for the UK’s departure from the EU.

Read more: Political uncertainty spooks investors as UK equity outflows increase

Just under 60 per cent of companies surveyed also said they were ready for a no-deal Brexit with little or no dependency on a transition period and no further extension.

Aside from Brexit, the figures showed executives are increasingly concerned about the risk of cyber crime, with 70 per cent saying they are now prioritising it as an area for investment.

Main image credit: Getty