Brexit takes toll on Britain’s financial sector, outlook weak

LONDON (Reuters) – Uncertainty over Brexit and the economy have led demand for Britain’s financial services to shrink for the first time in five years, with no immediate sign of an improvement, a survey by business group CBI and PwC showed.

FILE PHOTO: A river boat cruises down the River Thames as the sun sets behind the Canary Wharf financial district of London, Britain, December 7, 2018. REUTERS/Simon Dawson

And profitability in the sector which raises most tax in Britain was flat for the third quarter in a row in the three months to December 2018, the survey released on Monday said.

The survey of 84 firms said demand is expected to continue falling during the quarter to March, with profitability also expected to drop for the first time in three years.

“A combination of macroeconomic and Brexit uncertainty, regulatory compliance and global market volatility are taking a toll on the UK’s financial services sector,” CBI Chief Economist Rain Newton-Smith said.

“The persistent weakness in optimism and the deterioration in expectations sound a warning for the outlook.”

Britain’s parliament is expected to vote on Tuesday to reject the divorce settlement with the European Un

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