Banks and shops predict boom as economy gains

 

Britain’s tentative economic recovery has triggered a surge of optimism among the country’s banks even though their loans to companies fell in recent months.

That is the key finding of a major report out today from the CBI and PricewaterhouseCoopers, which chimed with similar improving figures on the retail sector.

Banks predict a boom in business volumes over the next quarter, having seen a subdued summer, while profitability is also likely to rise, respondents to the CBI survey said. The fall in activity with industry over the past quarter was dismissed as a “blip”.

Stephen Gifford, the CBI’s director of economics, said: “With optimism rising and jobs and profitability growing, this is an encouraging quarter for the financial services sector despite a fall in business volumes in banking. Firms are expecting positive momentum to carry into the next three months, alongside a strong recovery in business volumes, which will boost profits further.”

The CBI’s optimism is yet to be seen by many of its big company members outside the finance sector. Unilever last week triggered a widespread fall in share prices of consumer goods giants when it warned of weak sales in emerging markets and continued low growth in the developed West.

There may be further caution about the macro-economic picture this week in minutes from the last US Federal Reserve meeting and the IMF’s annual summit. The CBI made its habitual move to highlight the perils of regulating companies, with Mr Gifford warning: “Dealing with regulation is increasingly weighing on plans for business expansion.”

That plea came despite the fact that many of the country’s biggest financial services firms remain mired in scandals such as the mis-selling of PPI and interest rate swaps, Libor fixing, payday loan rip-offs, weak financial structures and, as emerged last week, alleged manipulation of the currency markets.

Meanwhile, the high street is starting to show signs of recovery although fashion sales have suffered from the warmer autumn compared with last year, according to new data. Shoppers steered clear of some of the big-name fashion brands, sending sales down 2.1% in September compared with a colder September last year, according to the BDO monthly sales tracker.

This was most recently typified by bell-wether John Lewis, which saw fashion sales slump 10% last week against the same week a year ago.However, non-fashion sales were up 3.7% with all areas apart from outdoor goods performing well.

It was revealed last week that mortgage approval levels hit a five-and-a-half year high in August, with retailers hoping to cash in on the extra business new homeowners offer. Homebase has said recently it was encouraged by the approval levels but that it typically takes six months for stores to see an increase in sales as a result of improved house market activity.

Carpetright had hoped for an increase in business from the mortgage approval stats, but issued a profit warning last week, saying not enough customers had been through its doors.

Don Williams, head of retail and wholesale at BDO, said: “Increasing job security is helping to encourage spending. The reality is that although  consumers are still feeling the pinch, they are less worried about losing  their jobs.”

Start your day with The Independent, sign up for daily news emails
Life and Style
Divers at Bouldnor Cliff underwater site in the Solent off the Isle of Wight, where the silt sample containing the einkorn DNA was found
life
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Sport
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
News
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
News
people
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Sport
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower