Financial services firms report gloomy end to 2025 - CBI

(Sharecast News) - Business volumes in the financial services sector continued to suffer a rapid decline in the final quarter of last year, according to the latest Financial Services Survey released on Thursday by the Confederation of British Industry. The weighted balance of business volumes was -38%, down from -36% in September. However, the CBI said firms expect volume growth to recover moderately over the first quarter of next year.

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

The survey found that sentiment among financial services firms deteriorated in the three months to December, with a weighted balance of -20 versus +3 in September. This marked the sixth consecutive quarter in a row of falling and/or flat optimism.

Profitability fell sharply over the fourth quarter, with a weighted balance of -53%, down from -13% in September.

CBI chief economist Louise Hellem said: "Financial services firms reported a gloomy end to 2025, with sentiment deteriorating amid persistent falls in business volumes and profits. But there are early signs of stabilisation heading into 2026, with firms expecting a moderate recovery in volumes in Q1 and a renewed focus on investment in digital and IT capabilities to support productivity, resilience, and long-term transformation.

"Recent Budget decisions, including changes to stamp duty for newly listed companies and avoiding a new banking levy, were welcome steps. To turn cautious optimism into sustained growth, the government must now focus on delivery and double down on the Financial Services Growth and Competitiveness Strategy to unlock investment, drive innovation, and reinforce the UK's global edge."

The survey was conducted between 20 November and 9 December 2025. There were 64 respondents.