BoE: financial services growth expectations 'particularly negative'

The Bank of England Agents survey, conducted between late August and mid-October, found that expectations for investment spending growth in the coming twelve months were most negative for construction and business services, particularly among financial services companies.

The survey also pointed to broadly stable or slightly lower investment spending over the coming twelve months, with uncertainty concerning future demand and trading arrangements expected to drag on spending.

Uncertainty about the demand outlook was the biggest drag on investment plans, particularly in manufacturing and construction. Uncertainty about future trading arrangements was the other main negative factor, especially for manufacturers. The results suggest that, in aggregate, pension deficits are not having a significant impact on firms’ investment plans for the coming year.

The Bank of England also found that housing market activity had recovered since the weakness seen in the immediate aftermath of the referendum, but the extent of the pickup was variable across regions and price brackets.