Britain's financial services grow at fastest pace since 2007, Cable sees Pound to be overvalued by 10-15%

Britain's financial services sector, which accounts for around 31% of the total GDP, surprised to the upside in the third quarter, as output of financial services companies rose the most since 2007, with the momentum to continue its uptrend towards the end of the year, according to a new study of the Confederation of British Industries. 60% of companies saw their business volumes increasing, whereas 11% said they fell, resulting in a balance of +49%, the highest reading since 2007. Surging volumes helped increase overall profitability, which rebounded after the previous quarter's contraction, and business volumes are expected to grow strongly again in the next quarter. Employment in the sector also rose compared with the prior quarter. According to the latest official data, activity in the overall services sector continued to increase in the second quarter, with output being 6.4% above the pre-recession high and grew 1.1% in the reported period.

Meanwhile, Business Secretary Vince Cable said the U.K.'s economic growth is being undermined by faltering exports, partly as a result of the high value of the Pound. He believes that the nation's currency is overvalued by 10%-15% on a trade-weighted basis. Cable's comments echo those of the IMF and BoE Deputy Governor Ben Broadbent, who said that the currency's strength may have a long-lasting effect on inflation.