Despite the retrenchment, sentiment among financial services recovered in the three months to December (+10% from -55% in September), despite gloomy expectations for activity in the quarter ahead.

The latest CBI/PwC Financial Services Survey found that business volumes grew at a solid rate in the quarter to December (+24% from +31% in September). Employment growth recovered to a firm pace (+23% from -8%), while profitability was flat (-1% from +24%).

Looking ahead to the next three months, financial services firms expect business volumes (-28%) and profitability (-26%) to decline. Headcount is anticipated to be unchanged.