Activity in the UK's financial services sector, which also includes health insurance, rose less than expected in the last quarter of 2009, a report revealed.

The study by the CBI and accountancy group PWC, said only 32% of firms saw a rise in their business in the three months to December.

For the same period 28% said they had fallen, resulting in a balance of +4% - less than the predicted rate of +16%.The report said a balance of +13% of firms expected a drop in business volumes in the current quarter.

This has to be the most negative expectation since December 2008. Respondents in the study also did not expect profitability to increase from January to March.

"The bounce in UK financial services activity over the past six months is not expected to last as we enter 2010," said CBI chief economic adviser Ian McCafferty. He added that job losses are also expected to be minimal in the coming quarter.

The survey covers banks, building societies, health insurance firms and market traders. PWC UK banking leader John Hitchins said banks were cautious about future regulations.