Financial services industry confidence in UK's economic prospects is falling, says CISI survey

by Lora Benson | Jan 14, 2016

Financial services industry confidence in UK’s economic prospects is falling,says CISI survey

The financial services industry’s confidence in the UK’s economic prospects is falling back to levels last seen in 2013, the latest CISI survey has shown.

Of 983 respondents to an online survey, the sum of those who were more optimistic about the outlook for the UK than eight months ago, minus those who felt less optimistic, was 6%.

When CISI last ran the survey in spring 2015 the comparative figure was 31%.

The CISI has conducted the poll every six months, since spring 2012, with the current figures reflecting economic confidence during an eight month period. The confidence level expressed peaked in autumn 2013, with a sum total of 54%, from a low of 8% in spring 2013.

Respondents were asked to compare how they felt about the UK economy six months ago, with 33% stating they were More Optimistic, 27% Less Optimistic and 40% Unchanged.

Concerns raised by survey respondents include debt, terrorism, austerity, Brexit and interest rate rises, with one contributor simply stating: “We are due a recession; it is time.”

Other comments included:

  • “Wages are low, taxes are high and there is more debt. And now there is talk of a rise in interest rates. We are very likely to go back into recession.”
  • “World economic events, especially in China, as well as political uncertainty regarding the US, a possible Brexit and the Middle East are likely to impact on business confidence.”
  •  “Cameron seems to be losing the EU argument, which will be bad for the City.”

  •  “The level of debt in combination with the rise in interest rates could be lethal in the long run, unless the UK never intended to pay it off in the first place. History has shown us that any time a country has been in such a high level of debt in comparison with its GDP, it has defaulted.”

  •  “Both the private equity and property markets look frothy. It is reminding me of 2005-2007”

  •  “Current terrorism activity is affecting market sentiment, so I feel it will remain stable artificially for a time as markets play a ‘wait and see’ game.

Simon Culhane, Chartered FCSI and CISI CEO said: “Our latest survey demonstrates the importance of the link between world events and public confidence in the UK economy, with a Brexit proving to be a serious concern for the financial services industry.”