UK Finance Confidence Soars: Three-Decade High Rebound

UK financial services logged its sharpest improvement in sentiment in three decades at the start of 2026, according to a survey from the Confederation of British Industry (CBI). Banks, insurers and investment managers reported a broad pickup in activity, with a positive balance of nearly two-thirds saying business volumes rose.

The change was stark compared with the end of 2025. In December 2025, the same indicator showed a negative balance of 38%, underscoring how quickly conditions shifted over a short period.

The CBI said the survey closed on March 18 and drew responses from 58 financial services firms, including major banks. Officials and industry respondents associated the stronger tone with recent quarters of solid profitability across parts of the sector.

The report also linked that performance to market outcomes, saying bank share prices had climbed to their highest levels since before the global financial crisis. Respondents additionally cited higher interest rates as a factor supporting improved conditions for the industry.

Alongside the rebound, firms pointed to ongoing costs and uncertainty. The sector is dealing with an £11 billion financial redress scheme for car loan customers, which was described as a notable headwind even as activity improves.

Respondents also said they are assessing geopolitical developments, including the conflict in the Middle East. Firms highlighted the possibility that external shocks could feed into financial markets and household borrowing conditions.

Looking ahead, survey participants said they expect business growth to continue into the next quarter, but at a slower pace than the initial surge at the start of 2026. Even with that expectation, respondents flagged risks around higher market volatility and potential knock-on effects for mortgage rates.

The Bank of England has previously warned that conflicts such as those referenced by firms could influence lending conditions. For global investors, the UK sector’s rapid improvement is being monitored alongside cross-border factors that can affect funding costs, risk appetite and capital flows.

Overall, the survey points to a strong near-term recovery in UK financial services while leaving open questions about how geopolitical risks and consumer redress costs may shape conditions in the months ahead.