Barclays profits plunge as bank issues global economy warning – The Guardian, Theguardian.com

Barclaysreported a fall in profits of more than 80% in the third quarter as its chief executive, Jes Staley, warned of the impact of the slowing global economy on the year ahead.

“We acknowledge that the outlook for next year is unquestionably more challenging now than it appeared a year ago, in particular given the uncertainty around the UK economy and the interest rate environment,” Staley said.

The bank set aside a further £ 1.4bn for payment protection insurance after a flood of compensation claims in the run-up to the August deadline. This takes its bill for the mis-selling scandal to £ (bn andto more than £ 46 bn for the industry as a whole.

Pre-tax profits in the three months to September plunged from £ 1.5bn to £ 246 m after the PPI charge. The bank had already warned that the last-minute surge in claims would result in an extra provision of between £ 1.2bn and £ 1.6bn.

On ThursdayBarclaysbowed to public pressure andscrapped a decision to stop its customers from withdrawing cash at post officesafter a barrage of criticism.

The bank’s U-turn came after it emerged that Barclays bosses would be questioned about the decision by a committee of MPs who had labelled it “a petty, penny-pinching move” and were hours away frompublishing a highly critical reporton the controversy.

Barclays said it had been “persuaded to rethink” its decision and would keep the cash withdrawal facility after all.