UK financial services sector enjoys a productive Q1 2013

The Organisation for Economic Co-operation and Development (OECD) and British Chambers of Commerce (BCC) have both said that there may be hope yet for Britain’s economy. The OECD argued that the UK will swerve a triple-dip recession, while the BCC has argued that the first quarter of 2013 has seen key balances in the manufacturing and service sectors strengthened.

The idea that the service sector is helping to lift the UK’s sluggish economy has also been supported by the latest figures from the Office for National Statistics (ONS), which revealed that UK’s service sector grew at its fastest pace for five months between December 2012 and January 2013, with output increasing by 0.3%.

In a year-on-year comparison, growth in the service sector – which accounts for three-quarters of the UK's annual economic output - was even more marked with output rising by 0.8%, driven by growth in the transport and financial services sector.

Services sector performing well

The figures reveal that the services sector, made up of areas including transport, communication, hotels and restaurants, has continued to thrive amidst an uncertain economic climate, unlike other areas such as the manufacturing and construction sector.

The positive services sector data was also supported by the Confederation of British Industry (CBI), which showed that 34% of 94 financial services firms had seen an increase in profits, while 48% had seen a rise in business volumes.

This upturn was driven by a rise in income from fees, commissions and premiums for 18% of businesses.

Commenting on the figures in a statement, Matthew Fell, CBI director for competitive markets, said: "This has been a strong quarter for the financial services sector, with robust growth in business volumes, an increase in profitability and upbeat investment intentions.”

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