U.K. Financial Firms Seen Hiring in the Third Quarter, CBI Says

Jun 29, 2014 9:23 pm ET

June 30 (Bloomberg) -- U.K. financial-services firms expect to restart hiring in the next three months as companies become more optimistic about their earnings, according to a survey by the Confederation of British Industry.

Banks, insurers and other financial firms will employ about 1.13 million people in the U.K. by the end of the third quarter, up 13,000 from the year-earlier period, Britain’s biggest business lobby group and PricewaterhouseCoopers LLP estimated in a survey. Employment fell in the second quarter, the CBI said.

Securities firms in the City of London’s financial district are adding compliance staff following probes by U.K. and other global regulators into the manipulation of benchmark interest rates, the alleged rigging in currency markets and money laundering. The CBI report found that 66 percent of respondents said dealing with legislation and rules was driving their investment.

“The sector is still facing a number of significant challenges,” Matthew Fell, CBI director for competitive markets, said in the report today. “The adverse impact of regulation on business expansion has crept up the agenda and concerns about the ability of firms’ business systems to cope with new demand has risen to its highest level in 13 years.”

Companies expect profitability to rebound after it fell in the three months through June after six quarters of rises, the CBI said. Respondents of the survey cited increased regulation and inadequate “systems capacity” to meet demand as factors likely to curb their growth over the next year, the CBI said.

The survey of 98 firms, conducted from May 19 to June 5, tracks business sentiment in the banking, securities, life insurance, securities trading and investment-management industries.

To contact the reporter on this story:
Ambereen Choudhury in London at achoudhury@bloomberg.net
To contact the editors responsible for this story:
Keith Campbell at k.campbell@bloomberg.net
Jon Menon, Steve Bailey