Even with business volumes and profits rising in the three months to June 2017, British financial services (FS) firms remain less confident about the future, according to the CBI/PwC Financial Services Survey.

Around 15% of firms were found to be more optimistic about the overall business situation as against three months earlier, whilst 25% were found to be less optimistic.

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The sentiment is in conflict with the overall business situation, with 47% of firms saying that business volumes increased and 3% citing otherwise. Overall profitability was also found to increase, with 41% of firms reporting rise in profits and 6% citing the contrary.

Also, 46% of firms were found to raise headcount, and 17% were found to reduce the same.

The study also revealed firms’ interest in IT spending, with 63% of them found to invest in technologies that enable data analysis and 48% in process automation. Moreover, 40% of the firms said that they were interested in investing in artificial intelligence, and 35% in situational data analysis such as sensors and wearables.

Level of demand, statutory legislation and regulation, and competition were pinpointed as the key growth impediments.

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CBI chief economist Rain Newton-Smith said: “The robust performance of financial services firms over the last quarter gives us a good dose of summer cheer. Volumes continue to expand strongly, profits are up and more people are being hired in a thriving part of the British economy. Even better, that is all set to continue over the next three months.

“But there are mixed messages coming from the sector. Whilst business activity is holding up strongly, optimism took another dive, which likely reflected a mix of Brexit uncertainty and concerns that financial market conditions could tighten.”