40,000 finance jobs face chop

LONDON (ShareCast) - Up to 40,000 jobs in the UK’s financial services sector could be lost over the next three years as the credit crunch forces banks and insurance companies to tighten their belts.

Credit-checking company Experian reckons as many as 10,000 positions will go in the City, which employs about 350,000, and 19,000 in London as a whole.

Around 65,000 jobs have been axed by banks and securities firms worldwide as losses and write-downs linked to the collapse of the US sub-prime mortgage market hit $319bn.

Experian expects UK employment levels to drop for the first time since 1992 as economic growth slows and businesses respond by cutting costs.

“Financial-services jobs are particularly vulnerable as the fallout from the credit crunch continues,” said William Thomson, director of international economics at Experian.

“The slowdown will bring the impressive run of job creation to a halt.”

Experian predicts that the British economy will slow from 3% in 2007 to 1.8% this year and 1.5% in 2009.

But the slowdown is expected to help narrow the north-south divide for the first time since 2002, with the south’s current 1% annual growth advantage set to fade.

Meanwhile, the downturn in the housing market will be made worse by slower growth and rising credit costs, says Experian. It believes UK house prices will fall 7.6% during the next two years.