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
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence