City job cuts could escalate
Job cuts across City finance firms could reach 13,000 in 2013, the Centre for Economics and Business Research (Cebr) suggests.
The new estimates show a further downward revision in the forecast for the number of City jobs.Cebr say London financial service firms have been trimming jobs levels since the recession of 2008-2009, and as pressure continues, deeper cuts will be made.
It is estimated the average number of City jobs will be down to 237,000 in 2013 an 236,000 in 2014, down from 354,000 in 2007.
This will be its lowest level since 1993. The report says job cuts reflect a collapse in many areas of City activity in mid 2012, including a 20% decrease in value of equity trading year-on-year; a 50% decline in international orders for equity trading; and gilts trading is down by a third.
Elsewhere, currency trading is down by 5% this year, the first fall since 2009. UK merger and acquisition activity has fallen by about a third during this year and international M&A activity has fallen even more.
Private equity and technology M&A appeared to be holding steady, offering some positive news.
Cebr Chief Executive Douglas McWilliams said: “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 bank cash to bankroll financial transactions. 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..”