Finance reigns in IT spending plans

A worse than expected jolt from the economy to companies in Britain's financial services industry has depressed the spending plans of their IT departments.



Quarterly research by the Confederation of British Industry shows that financers' new IT spending plans have been scaled back to match their lower trading forecasts.



Only in November, the CBI's outlook for new tech purchases was its brightest since August 2008, as a balance of +7 per cent financers were set to spend more on IT.



But the group's latest findings show that the proportion of financers planning to set aside more new cash for IT has fallen back into the red, albeit only marginally.



An anticipated slump in business activity over the next quarter appears to blame, but the mild upturn in trade during the last quarter was also "disappointing.".



"The bounce in UK financial services activity over the past six months is not expected to last as we enter 2010," added Ian McCafferty, chief economic adviser at the CBI.



"Firms see their business volumes falling back again, with no further improvement in profitability over the next three months."



Also looking forward, the financers said the use of IT systems and applications as a means to grow their outfit would reduce compared with the three months before.



Yet the overall balance of respondents set to invest in hardware and software to expand remains positive, thanks to finance houses, banks and general insurers.