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Financial sector to suffer slight slowdown?

06/01/15

The financial sector may be set to slow a little as two separate indicators suggested UK economic growth is weakening.

The financial sector has certainly been a growth area in the last few months, as it has benefited both from its own restructuring and recovery after the troubles of 2008-09, as well as wider economic growth.

All that has helped to create new jobs across the industry and given good reason for those seeking accountancy and tax advisory posts cause for optimism. This has also been in line with wider economic trends, as the number of people in work has soared and unemployment has plunged.

However, the strength of Britain's economic growth has come into question, both retrospectively and in terms of the prospects for 2015.

The initial estimate from the Office for National Statistics (ONS) for Britain's growth up to the end of September had been a quarterly rate of 0.7 per cent and a year-on-year increase in gross domestic product of three per cent, making the UK one of the strongest growing major economies in the western world this year.

However, the ONS has now revised this figure and concluded that the level of annual growth was actually only 2.6 per cent; still healthy, but not as strong as previously thought. 

The second quarterly estimate remained unchanged from the initial figure of 0.7 per cent, which may suggest the time when growth was not as strong as thought was earlier in the year.

However, the Confederation of British Industry (CBI) is convinced the UK is seeing its growth slow.

Its conclusion was based on the December edition of the CBI Growth Indicator. This still showed a healthy growth rate at plus 14 per cent, but this was the weakest figure for any month since July 2013.

Discussing the state of the economy, CBI director of economics Rain Newton-Smith said: "The economy is plotting a solid course as we head into Christmas. Whilst growth has slowed somewhat, this reflects a return to a steadier, more sustainable pace as the recent boost from pent-up demand fades."

So, while the economy is set to keep on growing and creating jobs, growth may have peaked.

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