The speed at which the UK’s financial services sector is shedding jobs will accelerate over the next quarter due to growing concerns about the escalating Eurozone crisis and the state of the global economy.
According to a survey undertaken by employers lobby group the CBI and auditors PricewaterhouseCoopers, UK banks, insurance firms and asset management houses look set to axe a further 11,000 positions in the first three months of this year, up from 9,000 in the final quarter of last year.
The cull will take the total number of jobs lost within the sector since the collapse of Lehman Brothers during the fourth quarter of 2008 to 101,000. The industry employs about 1.05 million people.
The expected retrenchment comes despite last quarter’s faster-than-anticipated growth in business volumes and increasing profits. But overall optimism has dropped compared with three months ago, falling to -24% from -20% in September.
Ian McCafferty, the CBI’s chief economic adviser, said: “Firms are less optimistic, employment is down and investment intentions for next year are weaker, as concerns about the global recovery and ongoing troubles in the Eurozone create uncertainty.”
City vacancies slump
The situation was also not being helped by “UK austerity, weak household incomes, increased competition, significant regulatory changes” and a fight for funding, all of which pointed to a “challenging year for bank management”, he added.
Unsurprisingly given this backdrop, new vacancies in the City fell 8% last year to 54,020, down from 58,830 in 2010, according to a report by financial services recruiter, Astbury Marsden.
But worryingly, the figures masked a marked slump in the jobs market in December, when only 1,490 jobs were created, down 43% from 2,620 the previous year. The findings are significant in that where financial services leads, the rest of the UK jobs market tends to follow.
Mark Cameron, Astbury Martin’s chief operating officer, said: “Although there were well over 50,000 new City jobs created last year, many of them were replacements for staff leaving for other jobs rather than brand new roles. Many of the genuinely new jobs that were created were to deal with the legacy of the banking crisis.”
Moreover, the Eurozone crisis was hanging over everything like a cloud and until a political solution was delivered, “we expect City hiring to remain moderate”, he added.
