Recovery in business volume, but market trends overall are uneven
Our latest quarterly City Indicators Bulletin reports that there was a further recovery in volume of business of UK financial services firms recorded by the CBI/PwC survey in Q2. This was the eighth survey in succession that a rise has been reported and a further increase in business is expected in Q3. But market trends overall are uneven with five indicators rising, seven falling and one flat in Q2 compared with the previous quarter.
Three of the six financial market Indicators that feature in the Bulletin rose in Q2, including a 22% six-month rise in foreign exchange trading in the UK and the biggest quarterly IPO total in Europe (€13bn) for over three years. M&A in Europe has continued to show a hesitant recovery since the low point of 2009. The other three financial market indicators were down including net UK bank lending to the private sector (excluding lending to financial services), trading in UK equities and trading at NYSE Liffe.
Other indicators to decline were FSA authorisations of firms and individuals and new City job vacancies: a sharp rise in new candidates points to a tighter market for jobs. Take up in the office market in central London fell again with the vacancy rate edging down and prime rents stable.
Over 12 months the trend is a little stronger than the quarterly trend with seven out of13 indicators rising and six falling between Q2 2010 and Q2 2011.
