16 year high as financial service sector cuts jobs

LONDON

Britain’s financial services industry is cutting jobs at the fastest rate for 16 years as it cuts costs to soften the blow of a steep fall in profitability, a survey showed on Monday. The CBI/PWC financial services survey, covering the three months to early March, found 9 percent of companies reporting a rise in business volumes and 56 percent saying volumes fell, giving a net 47 percent of companies reporting a fall.

That marked a sixth successive quarter of declines.

• A balance of 47 percent of firms also reported a fall in profitability, a slight improvement from a record drop in the previous survey. A net 27 percent of firms expected a further decline in coming months.
• A balance of 40 percent of firms reported a reduction in staff during the latest quarter, the heaviest fall in numbers employed in financial services since June 1993, the report said.
• A similar fall (-38 percent) is forecast in the current quarter as the global economic crisis continues to hit banks, insurers and other financial firms.
• A net 45 percent of companies surveyed said they see a high likelihood of further deterioration in financial market conditions, and two thirds of respondents said they thought Britain was a less competitive financial services centre as a result of the credit crisis.

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