Financial services activity rebounds in Q1 - CBI

6th Apr 2026 22:31

(Sharecast News) - Business volumes in the financial services sector rebounded in the first quarter at the fastest rate since December 1996, according to the latest survey released by the Confederation of British Industry on Tuesday.

Sentiment improved for the first time since June 2024, while profitability recovered. The quarterly survey also found that financial services firms expect volumes to continue growing at a fast pace next quarter, while headcount is expected to rise slightly, having been broadly flat since the final quarter of last year.

Investment intentions for the year ahead remain mixed, while firms are planning to boost spending on IT, and cut capital expenditures on land and buildings and vehicles, plant & machinery.  

The weighted balance of business volumes was +65% in the three months to March, up from -38% in December.

A balance is the difference in percentage points between the weighted percentage of firms answering that output is up and those saying output is down.

The weighted balance for sentiment was +31%, up from -20% in December, while the balance for profitability was +38% versus -53% following seven consecutive quarters of decline.

The weighted balance for headcount was broadly flat at +3% over the three months to March compared to -1% in December.

CBI deputy chief economist Alpesh Paleja said: "Financial services firms saw a sharp recovery in business volumes at the start of 2026, which helped drive a rebound in sentiment. Activity is expected to remain strong next quarter, but investment intentions remain mixed as concerns about demand uncertainty rose to their joint-highest since 2012. 

"The sector still appears to be digesting the implications of conflict in the Middle East. This is not surprising given that financial services firms are at the epicentre of volatile market moves, and that the economic impact of the conflict is still crystallising.     

"Navigating through these uncertain times will require the government to double down on delivering the Financial Services Growth and Competitiveness Strategy. Priorities must include continuing to work with the FCA and PRA to streamline unnecessary regulatory burdens, accelerating delivery of the Mansion House reforms, and deploying capital at scale through catalytic finance programmes - including the British Business Bank." 

The survey was conducted between 27 February and 18 March.