Brexit alarm bells ringing at ‘deafening level’ in City of London, says CBI

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Alarm bells are ringing at a “deafening level” in the City of London after optimism among financial services firms fell at its fastest pace in six years, according to a leading business group,

Falling business volumes, a sharp decline in jobs and the “national emergency” of Brexit have damaged confidence among bankers, a survey by the Confederation of British Industry (CBI) and PwC suggests.

The poll of 84 companies showed that 10 per cent of firms were more optimistic about the overall business situation compared with three months ago, while 53 per cent were less optimistic, which means optimism in the industry has now been either flat or falling for more than three years.

The proportion of companies who think the amount of business they are likely to do will increase in the next three months dropped to its lowest for more than decade.

Despite plummeting optimism, profits in the financial services sector grew and that trend is expected to continue.

Rain Newton-Smith, the CBI’s chief economist, said: “The alarm bells ringing at the state of optimism in the financial services sector have now reached a deafening level.

“Not only has it plummeted at the fastest rate since the depths of the financial crisis, it has been falling or flat since the EU referendum. Additionally, business volumes and employment have fallen over the last quarter.

“Brexit is now a national emergency. No deal has to be clearly ruled out, then MPs must finally compromise and deliver a solution that protects jobs, livelihoods and communities across the UK.

“It is in absolutely nobody’s interest for the uncertainty to drag on, and continually chip away at our economy and financial services sector.”