Financial services mini-boom falters

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THE MINI-BOOM witnessed recently by financial services companies has begun to falter. A surge in activity during the second quarter was followed by a drop in business during July, August and September, according to the quarterly survey of the sector by the Confederation of British Industry and the chartered accountants Coopers & Lybrand.

But fortunes were mixed, with a reduction in the amount of work done for industrial and commercial firms the chief reason behind the fall. Business with private individuals, other financial institutions and overseas customers continued to expand, however.

Andrew Sentance, the CBI's director of economic affairs, described the recovery in financial services business as 'still patchy.' While securities traders, fund managers, venture capitalists and general insurers had done well in the third quarter, banks and life insurers, which account for about half the sector, had reported falling activity levels, he said.

The survey, which covers about 300 banks, finance houses, building societies and insurance groups, records expectations of a sharp rise in activity in the fourth quarter.

All sectors are now more optimistic than in June - although Mr Sentance pointed out that predictions of a similar pick-up three months ago had failed to materialise in the most recent quarter. Insurance brokers, finance houses, fund managers and venture capitalists are the most positive.