--- title: U.K. Firms Boost IT Spending As Regulations Loom description: U.K. Firms Boost IT Spending As Regulations Loom --- ![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/) - [*Facebook*](https://www.facebook.com/MarketsMedia/) - [*Twitter*](https://twitter.com/marketsmedia) - [*Linkedin*](https://www.linkedin.com/company/markets-media-llc) - [Newsletter](https://articles.marketsmedia.com/u-k-firms-boost-spending-regulations-loom#popup-newsletter) #### Want the latest news on securities markets -- FREE? 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In a survey published today by auditor PricewaterhouseCoopers (PwC) and the Confederation of British Industry, an employers’ group, the pair found that optimism in the U.K. financial services sector had risen for the first time in a year. The survey also found that spending intentions for IT were the strongest in a year. “The technology investments will be mainly driven by the need to grow revenues but the changing regulatory compliance will also contribute significantly,” says Jaroslaw Knapik, a financial services analyst at U.K. consultancy Ovum. Following deep cuts to IT budgets in 2008 and 2009, banks are preparing to deal with new rules such as Emir (European Market Infrastructure Regulation) that are aimed at forcing all over-the-counter derivatives on to regulated venues by the end of this year. The automation of the many stages of the processing of a derivatives trade will add to a firm’s IT costs. “More positive economic data and a slightly more stable environment in the eurozone mean that banks are much more confident about their sector,” said Kevin Burrowes, U.K. financial services leader at PwC. “This confidence is translating into recruitment with many banks reporting that they plan to increase headcount over the coming months. Banks are also planning to invest in their businesses, particularly their digital offerings.” In their latest quarterly poll of 95 finance firms, a balance of 19% of firms hired new staff in the first three months of the year. “Financial services sales volumes and income continued to rise this quarter, putting the sector’s recovery on a firmer footing,” said Ian McCafferty, the CBI’s chief economic adviser. “Optimism levels and business investment intentions have also improved, in contrast to last quarter as some of the worst risks around the euro area crisis have eased. “The unexpected rise in employment is a further encouraging sign for the sector. But with the current level of business regarded as below normal, conditions still remain challenging for financial firms.” In another survey released today, auditor Deloitte, which gauged the views of chief financial officers from 136 major companies, revealed that most CFOs no longer expect the U.K. to face a double-dip recession. Just 30% of those surveyed now see this happening, down from 54% at the end of the last quarter of 2011. “The worries about the risk of recession and a break-up of the single currency that dominated corporate thinking at the end of last year have eased,” said Ian Stewart, chief economist at Deloitte. “Stronger financial conditions, reflected in rising global equity markets, are seen to be benefiting larger UK companies.” Mark Parsonson, executive director of UK-based fund of hedge funds manager Liongate Capital Management, says that the Long Term Refinancing Operation, in which the European Central Bank has handed out over €1 trillion in cheap loans to lenders in the last three months, has helped ease the economic situation in Europe. “The LTRO in Europe took a lot of the imminent risk off the table, providing a lot of liquidity and stabilizing the banking sector,” he said. “With the perception of less macro risks, markets have shifted to focusing on fundamentals.” Meanwhile, a third study released today showed that British manufacturing activity picked up at its fastest pace in 10 months in March, which increases the chances that the U.K. economy grew in the first three months of 2012 and thus avoided a recession. The Markit/CIPS Manufacturing Purchasing Managers' Index rose to 52.1 in March from 51.5 in February, beating analysts’ forecasts for the month of 50.7 and hitting the highest level since May last year. Any figure above 50 suggests expansion rather than contraction. The three upbeat surveys may result in the Bank of England holding off on injecting more stimulus into the U.K. economy once its £325 billion quantitative easing program is complete in May. 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