Thousands of job cuts are expected in the UK’s financial sector as a result of the volatile equity and credit markets, economists have warned.
Up to 5,000 positions could be lost, along with annual bonuses in the wake of a turbulent time in London’s financial district over recent weeks, according to Jonathan Said, a senior economist at the Centre for Economics and Business Research.
“We are looking at job losses across industries including hedge funds, private equity, investment banks, those working in structured funds,” Said told the BBC.
He said losses would be known when the impact of the financial market was revealed. “But roughly, in the next six months, we predict up to 5,000 job cuts across banks, private equity firms, hedge funds, stockbrokers and other financial groups as they try to cut their losses,” he added.
Said also forecast a decline in City bonuses by up to 15% in 2007. Last year, bonuses in London’s financial centre increased by 18% to a record £8.8bn.