UK set to lose most banking jobs in Europe
THE UK will shed 35,000 financial services jobs by the end of 2009, with Britain set to be the European nation worst affected by the sector’s troubles, according to new research from Canada Corporation.
A report commissioned by the City estimates that the European financial services sector will decline by 6.2 per cent during 2009.
But Britain’s finance industry output is predicted to fall even further, plummeting 9.6 per cent over the year, well below the 5.6 per cent drop predicted for Germany and worse even than the eight per cent decline expected in France.
Of 84,000 financial services jobs forecast to be cut in the EU this year, the UK is likely to account for around 35,000, the report said.
The expected cuts will mark a dramatic turnaround from the boom period in the middle of 2008, when the sector employed nearly 1.4m in the EU and accounted for €219bn of economic output.
The dip in wholesale financial services output is set to continue into 2010 before expanding from 2011 onwards, the report said.
But despite the predicted uplift, there are still set to be 10,000 fewer finance jobs in the UK by 2013 than there were last year.
Stuart Fraser, chairman of the City’s policy and resources committee, said financial services were “vital and necessary” in the battle to pull the EU out of recession.
He welcomed efforts towards regulatory reform but warned against the danger of hampering the sector’s recovery with overzealous regulation.
“Regulatory controls properly applied should protect against systemic risks while not discouraging the competitive benefits from useful innovations,” he said.
“This is an important balance for governments to get right.”
The City accounts for around a third of the UK’s corporation tax revenue and around 15 per cent of all tax paid into state coffers, Fraser added.