OPTIMISM in the financial services sector fell in the quarter to September, marking the sixth decline in the last seven quarters.

The falling confidence among financial services firms continued in spite of an expansion of business volumes and expectations of a stronger quarter ahead, according to the latest CBI/PwC Financial Services Survey.

The sector is now in its longest period of falling sentiment since the financial crisis of 2008.

Rain Newton-Smith, CBI chief economist, said that while it was encouraging to see volume and profitability expand, the fall in optimism over the last two years could not be ignored.

“With Brexit uncertainty affecting the wider economy, it’s vital that substantive progress is made during the next round of Brexit negotiations, so that transitional arrangements can be agreed and businesses can make decisions now about investment and employment that will affect economic growth and jobs far into the future,” he added.

The survey found that 12 per cent of firms were more optimistic about the overall business situation compared with three months ago, whilst 18 per cent were less optimistic, giving a balance of -6 per cent.

While banks and building societies were markedly less optimistic, finance houses, life insurers and investment managers were more optimistic than they had been in the previous three months.