An increasing number of UK financial services firms expect a rise in loan defaults over the next three months, the latest reminder of the gloomy economic outlook.
A balance of 23% of respondents to the CBI/PwC Financial Services Survey said they expect the value of non-performing loans to increase in the next quarter. According to the poll, that value was 5% in September.
The balance is calculated by subtracting the percentage of respondents who said they expected an increase and subtracting the percentage who said they did not expect it.
The survey also found that financial institutions identified regulatory changes as the top driver of disruption in their business by 2023. Inflation came second and digitization third.
The UK announced a series of reforms in December to “give a boost to growth” for the country’s banks, insurers and asset managers. But some in the City of London fear 2023 will be dominated by a jumble of judgment rather than action.
“All eyes are now on the upcoming spring budget to see if the chancellor can build on the stability provided by the fall statement and deliver a concrete growth plan,” said CBI chief economist Rain Newton-Smith.
The latest survey included 95 companies and was conducted between November 22 and December 9.
Photo: The sun rises over skyscrapers in the Canary Wharf business, financial and shopping district of London, UK, on Monday, October 3, 2022. Photo credit: Carlos Jasso/Bloomberg
Copyright 2023 Bloomberg.
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