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Recovery reaching the financial sector as confidence makes a comeback.

ECONOMIC recovery is starting to feed through to the financial services sector with rising profits and jobs, a new study has shown.

The CBI said its survey of 87 firms showed a "notable" pick up in business with industrial and commercial companies, with predictions that profits will continue to increase this year.

Employment in financial services organisations grew in recent months at the fastest pace since 2007, with an increase of 10,000 in the fourth quarter of 2013, said the CBI.

A further rise of 15,000 is expected in the first three months of this year, taking employment in the sector to 1.16 million, still 52,000 lower than the end of 2008.

Matthew Fell, the CBI's director for competitive markets, said: "As the recovery takes root in the wider economy, it is beginning to feed through to financial services firms. Things are starting to look more 'normal' after five years of volatility. "All the key indicators - optimism, business volumes and profitability - are up. But it's particularly encouraging to see longer term confidence indicators like marketing spend, employment and investment spend also rising strongly.

"It's also telling that financial services firms are now less worried by levels of demand and regulation and are instead concerned about a skills crunch, their systems capacity and stronger competition."

Kevin Burrowes of PwC, which helped with the research, added: "Banking sentiment continues to improve strongly, mirroring the UK economic rebound. We hope that as trust is earned and rebuilt over time, banks will increasingly be recognised positively for their role in society and their contribution to the UK economy."
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Jan 20, 2014
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