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UK financial firms see surprise drop in business in Q3: survey

LONDON--British financial firms saw an unexpected drop in business in the third quarter and are cutting jobs to rein in costs, according to a survey published on Monday.

Some 30 percent of financial firms saw business volumes rise during the period, compared with 49 percent reporting a fall, the survey by the Confederation of British Industry and accounting and consultancy firm PricewaterhouseCoopers found.

The net decline comes after nine consecutive quarters of growth.

“The financial services sector has faced a tough quarter, with sales volumes unexpectedly falling and average costs rising, thus denting profits. Sentiment about the business situation also continued to fall,” said Matthew Fell, the CBI's director for Competitive Markets.

The CBI said the need to address the burden of statutory legislation and regulation had again been a key driver behind business costs and capital expenditure plans over the coming year. About three-quarters of the 104 companies that responded to the survey planned to increase their expenditure on regulatory compliance in the next year.

Fell said uncertainty over demand and the ongoing euro zone crisis were encouraging firms to scale back investment and reduce headcount.

A separate survey by recruitment firm Astbury Marsden on Monday said the number of new jobs created in the City of London finance district fell by 15 percent in September.

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