Financial services continue to recover

The recovery in the UK financial services sector is continuing, a survey suggested Monday, with optimism improving and firms taking on new staff. PricewaterhouseCoopers (PwC) group and employers' group the CBI found business volumes in the three months to March grew for the eighth quarter in a row. Optimism in the sector rose for the first time in a year. A separate survey of UK finance chiefs suggested that fears of a UK recession or a euro break-up have eased. But while confidence is up among UK corporates, large businesses still remain cautious about raising their spending, accountancy group Deloitte said. Last week, the Paris-based Organisation for Economic Co-operation and Development (OECD) predicted that the UK economy would shrink in the first quarter of 2012, taking it back into recession. But many other analysts are predicting economic growth in the first quarter. The CBI/PwC survey said there had been an unexpected increase in employment in the financial sector. A balance of 19 percent of firms hired new staff in the first three months of the year, the survey said. "Financial services sales volumes and income continued to rise this quarter, putting the sector's recovery on a firmer footing," said Ian McCafferty, the CBI's chief economic adviser. "Optimism levels and business investment intentions have also improved, in contrast to last quarter as some of the worst risks around the euro area crisis have eased. "The unexpected rise in employment is a further encouraging sign for the sector. But with the current level of business regarded as below normal, conditions still remain challenging for financial firms", the CBI's chief economic adviser added.