Financial services optimism in the first quarter of 2019 dived at the fastest rate since the financial crunch of 2008 amidst uncertainties related to Brexit.
The findings are from a quarterly survey carried out by the Confederation of British Industry (CBI) and PwC.
The study polled 84 financial services firms.
Of those polled, 53% were less optimistic about the overall business situation compared to the prior quarter while only 10% of firms were more optimistic.
This offers a balance of -43%, versus -24% in the prior quarter.
Moreover, business volumes declined at the fastest pace since September 2012.
Employment prospects were gloomy as well, with 38% of the firms reporting a drop in headcount and 17% reporting an increase.
On the bright side, 47% of the firms registered growth in overall profits while 26% posted a fall.
The balance was +21%, which is an improvement on +4% in the previous quarter.
When asked about areas of investment focus in the next 12 months, IT spending emerged as the top priority followed by marketing.
CBI chief economist Rain Newton-Smith said: “The alarm bells ringing at the state of optimism in the financial services sector have now reached a deafening level. Not only has it plummeted at the fastest rate since the depths of the Financial Crisis, it has been falling or flat since the EU referendum. Additionally, business volumes and employment have fallen over the last quarter.
“Brexit is now a national emergency. No Deal has to be clearly ruled out, then MPs must finally compromise and deliver a solution that protects jobs, livelihoods and communities across the UK.”