London
finance jobs to hit 20-year low
Financial
services firms based in the city of London will continue to shed
staff over the next two years, taking employment in the sector back
to its lowest level in twenty years, according to a study released
Tuesday.
6
November, 2012
The
Center for Economics and Business Research predicted the average
number of jobs in wholesale financial services in the city would fall
to 236,000 by 2014, down by 118,000 since 2007 before the global
financial crisis exploded.
"The
fall in activity is partly a function of the weak economy, partly a
hangover effect from the financial crisis and partly caused by
increasing regulation which limits access to cash to bankroll
financial transactions," Chief Executive Douglas McWilliams said
in a statement.
"The
business model for many firms in the city -- which was based on
taking a percentage from yields of 8% plus -- has to change in a
world where low yields are likely for many years to come."
London
and New York vie for the title of the world's leading financial
center, but banks and investment firms in both cities have been hit
by the collapse in activity triggered by recession, the regulatory
changes introduced in its wake and trading scandals.
Swiss
bank UBS said last week it was planning to shed 10,000 jobs over
three years, equivalent to about 15 percent of its workforce, as it
scales back investment banking to focus more on wealth management.
Financial
services firms account for about 10 percent of the British economy
and have been an important source of income for many other businesses
in London, from real estate agents to restaurants and art dealers.
Britain
emerged from recession in the third quarter, thanks in part to the
impact of the 2012 Olympic Games, but recent data suggests the
underlying picture remains fragile. October retail sales were poor
and consumer confidence is at a 6-month low. The wider services
industry grew at its slowest rate in almost two years last month.
The
deepening economic gloom across Europe is also taking its toll on
London.
CEBR
reported a sharp drop in trading in debt and equity this year, and
the first decline in foreign exchange trading since 2009. British
mergers and acquisitions activity has fallen by about a third,
international M&A by even more, it said.
Europe
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