Axe poised over 35,000 financial jobs in Britain

Hugo Duncan
1 Sep 2009

The City of London today warned 35,000 jobs in finance will be axed in the UK this year as the capital bears the brunt of the global financial crisis.

A hard-hitting report said Britain will be the worst-affected country in Europe by the jobs cull and will still have 10,000 fewer roles in banking, insurance and fund management in 2013 than it did last year.

Any resurgence in hiring depends on economic growth, according to Stuart Fraser, chairman of the policy and resources committee at the City of London Corporation.

“We'll have slow growth for the next few years, and that takes us to 2013 or 2014,” he said.

Banks and financial firms around the world have cut 330,000 jobs since the third quarter of 2007 when financial markets seized up in the wake of the sub-prime mortgage crisis in the US.

Some 140,000 of them have come in Europe with the UK and London in particular the hardest hit.

The City said 84,000 finance jobs will go in Europe this year with nearly half — or 35,000 — in the UK. Many of these will be in the City and Canary Wharf.

The report predicted the financial services sector in Europe will shrink by 6.2% this year from its 2008 high when it accounted for €219 billion (£192.2 billion) in EU economic output and nearly 1.4 million EU jobs.

Output from the UK financial district is set to fall 9.6% compared with an 8% decline in France and a 5.6% drop in Germany.

The City forecast another 1000 UK job cuts next year before growth from 2011. However, there will still be 10,000 fewer finance jobs in 2013 than the 363,000 held at the end of last year.In contrast, strong growth elsewhere in Europe means there will be 5000 more finance jobs across the continent in 2013 than there were in 2008.

The report was published as Fraser lobbied regulators in Brussels to rethink the draft directive on Alternative Investment Fund Managers which many fear will damage Europe and London's economic competitiveness. He will be joined by London Mayor Boris Johnson tomorrow.

Fraser said the financial sector will play a crucial role in driving the EU out of recession.

“Financial services provide vital and necessary tools for international businesses to manage finance, risk and access investment — and notwithstanding the crisis the sector still accounts for between a third and a half of the EU's surplus of all services,” he said.

“Of course we need an improved, co-ordinated regulatory structure to protect against systemic risk in the financial services industry, but we also need to retain the ability to innovate, in a properly managed and transparent way.

“Getting this balance right is crucial. Any proposed regulation also needs to be evaluated to avoid unintended and damaging consequences.”