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CBI flags City jobs fears

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By Lee Wild

Date: Monday 31 Mar 2008

LONDON (ShareCast) - As many as 11,000 jobs could be lost in the financial services industry over the next three months as the City feels the repercussions of the credit crunch, warns the CBI.

A survey carried out by the UK employers' group and accountants PricewaterhouseCoopers showed 33% more firms expect to cut jobs over the next three months than hire.

The quarterly analysis revealed that both employment and profitability have declined at their fastest rate in five years, while confidence is down for the third quarter in a row.

Finance firms also expect worse to come over the next six months, with the credit squeeze set to continue, thought almost all of the businesses surveyed.

Nearly half had suffered a drop in business volumes, nearly a fifth had seen a fall in profits, while 25% more companies had cut jobs than added them.

“It’s clear that the credit crunch has worsened over the first three months of this year,” said the CBI's chief economic adviser, Ian McCafferty.

“The interbank markets have become more gummed up, with banks even more unwilling to lend, and credit spreads have widened.”

The gloomiest outlook came from securities traders and the life insurance industry as both believe the credit crunch will dent sales and revenue growth.