Financial services activity falls at fastest pace since 2020 – CBI Financial Services Survey
02 October 2025
Business volumes in the financial services sector fell at the quickest rate since June 2020 in the third quarter of 2025, according to the latest CBI Financial Services Survey. Despite the sharp deterioration in activity, sentiment was broadly flat in the three months to September, marking an improvement compared with the previous quarter's steep drop.
The quarterly survey, conducted between 27 August and 15 September, found that FS firms expect trading conditions to improve next quarter, with volumes growth set to make a strong recovery. Headcount is anticipated to decline at a slower rate, and investment intentions improved (relative to Q2) despite widespread uncertainty about future demand conditions.
Key findings:
Business volumes declined in the quarter to September at the fastest rate since June 2020 (weighted balance of -36% from -24% in June). However, firms expect volumes growth to make a strong recovery next quarter (+37%).
Sentiment was broadly flat in the three months to September, following a sharp fall in June (+3 from -52% in June).
Average spreads fell at a fast rate in the quarter to September (-47% from -22% in June) but are expected to decline at a relatively slower pace over the next three months (-23%).
The value of non-performing loans was broadly flat in the quarter to September (-1% from -20% in June) and is set to remain unchanged over the next quarter (0%).
Profitability declined at a slower pace in the quarter to September compared to Q2 (-13% from -24% in June). FS firms expect profitability to rise at a fast rate next quarter (+26%).
Headcount fell over the quarter to September at a firm pace (-24% from -7% in June). Firms expect headcount to decline at a slower rate in the next three months (-7%).
FS firms expect to increase investment in IT over the next twelve months (compared to the previous twelve). Capital expenditures on land & buildings and vehicles, plant & machinery are expected to decline, but to a lesser extent than last quarter.
Uncertainty about demand was the most commonly cited factor expected to limit investment over the next twelve months, rising to its highest share since September 2012 (69% from 55% in June; long-run average of 48%).
Just over a quarter of firms cited 'other' factors as likely to limit investment (26% from 45% in June; long-run average of 8%), with comments pointing to challenges arising from taxation and regulation.
Louise Hellem, CBI Chief Economist, said:
"Financial services firms saw the sharpest fall in business volumes since the pandemic during Q3, alongside a fast decline in spreads. However, sentiment steadied in the quarter to September, and firms expect a strong rebound in volumes growth in Q4. While investment intentions improved relative to last quarter, uncertainty over future demand, cited by the highest share of firms in over a decade, continues to weigh on capex plans for the year ahead.
"Whilst challenges remain, there are shoots of potential economic momentum for the financial services sector heading into Q4. Harnessing this momentum will depend on the decisions the government makes during the forthcoming Budget, with the CBI's message clear: there can be no further tax rises on business. Instead, the government must focus on promoting the strengths of our world leading financial services sector and double down on delivery of the Financial Services Growth and Competitiveness Strategy.