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A well-functioning financial services sector could create an additional 47,500 jobs within the financial sector and over 218,000 more jobs in the wider UK economy by 2020, according to research by PricewaterhouseCooper (PwC).
Nick Forrest, director and financial services economist at PwC said: “The financial services sector has a critical role in the UK economy. In addition to providing credit, it creates demand in other sectors and helps improve the flow of capital around the economy. A well-functioning financial services sector improves both capital efficiency and overall UK productivity.”
The PwC report found that according to the most recent figures; businesses bought more than £113 billion of financial services in 2010. The financial services sector in 2010 in turn, bought £90 billion worth of goods and services from other industries and sectors. Sustainable and well-regulated growth in the financial services sector could generate +22,000 additional jobs by 2020 in the insurance industry alone.
Jonathan Howe, UK insurance leader at PwC, said: “Our analysis shows the important contribution the UK insurance sector makes to not only the financial service sector, but to the whole of the UK economy, A thriving insurance sector is essential to both the UK economy and to individuals, yet it is important that this is supported with a sustainable and stable regulatory regime. The financial crisis brought to light many unsustainable practices in banks and providers of financial services that have highlighted the need for better regulation.”
Nick Forrest added: “Business confidence depends upon trust in a well-functioning financial services sector. The greater confidence that businesses have that their future profitability will increase, the more likely it is that they will invest, leading to an increase in the different components of GDP; such as consumption and exports.”