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The condition in the businesses as said by the UK key financial services sector were getting difficult in the next 3 months because of the increase of worldwide interest rates. The companies were experiencing strong growths as discovered by Confederation of British Industry; in a balance of +51 they are higher.
This is the highest reading so far in the last 7 years. But the contraction at the growth of the business in now predicted, in a balance of +3 is the expected to further increase in the next month. Survey shows 68 companies expecting a fall in their profit.
"There are signs that activity in the sector may be starting to come off the boil," said Ian McCafferty, chief economic adviser at the CBI. "This may yet turn out to be another soft patch...but could be the first sign of the impact on financial markets of recent rises in global interest rates.”
Weakness in the financial service sector of UK is important in the total growth in the economy, since it is 30% in the total result.
The economic status has increased in the trend growth rate for a year, although some had expected a slow down in the next quarter, because of the increase interest rate in the details of the survey the confidence falls down in building societies were in businesses mortgage lending, this can be a sign that the housing market of UK is indeed slowing down.
Building societies that were surveyed, they are positive about the coming quarter they are already awaiting difficulties in businesses.
According to John Hitchines, he is the financial services partner in PricewaterhouseCoopers, he help in carrying out surveys, building societies mortgages lending are investing for the expansion, of businesses, this implies that they are not expecting long economic slow down.
"House prices in the U.K. are still underpinned by shortage of supply in housing," Hitchins said.
The survey also reported some uncertainty in outlook among securities traders. PwC said this was "best explained by concern over the levels of leverage in some recent merger & acquisition transactions, and the habitual market trepidation about market performance during the summer period."
15:53
Posted on Jul-02-2007
