The Confederation of British Industry and Pricewaterhouse Coopers estimates in their quarterly Financial Services Survey that the sector grow for the second consecutive quarter between October and December last year, with half of respondents to their survey reporting increased profit.
However, the number of those employed in financial services fell at the fastest rate for 17 years.
John Cridland, the institute’s director-general designate, said that the disappointing employment figures were probably caused by "renewed cost control given little growth in incomes and slower growth in profitability."
"Whereas the banks expect business volumes to remain subdued next quarter, securities traders and investment managers have fared much better and are continuing to take on staff," Cridland said. "Growth in business with private individuals in the last quarter may well reflect households continuing to strengthen their finances. But looking ahead to the next quarter, commercial business is expected to increase significantly."
The figures also suggest that growth in sector varies depending on customer base, with those working with individuals faring far better than those with industrial and commercial companies.
The institute also predicted that business would improve across the sector in the next quarter apart from financial institutions.
