City firms are set to cut tens of thousands of jobs as conditions in the
industry worsen, a survey warns.
The Confederation of British Industry study predicts the finance sector
faces a gloomy winter with job cuts accelerating.
It warns that while job cuts in the fourth quarter had not been as bad as
expected, "the employment situation is expected to deteriorate more
sharply over the next three months".
The CBI quarterly survey reveals that in the last quarter of last year, the
UK finance sector suffered its biggest drop in business volumes since 1992.
John Hitchins, UK banking leader at PricewaterhouseCoopers, which helped to
compile the survey, said: "Industry ended 2002 in a worried frame of mind,
reflecting growing concerns about a slowdown in personal sector business and
specific fears on the state of the housing market. More jobs are likely to be
lost in 2003 as firms grapple with their cost bases in the face of uncertain
Ian McCafferty, CBI chief economist, also has fears. "Last year was a
difficult year for the financial services industry, especially those affected
by the performance of the stock market.
"Across the sector, the sharp rebound reported in the April to June
quarter prompted hopes that the industry would return to a normal pattern of
continuous expansion. But subsequent surveys show that difficult conditions
remain," he added.