Britain’s finance sector to lose 15,000 jobs

January 13th, 2009 - 5:27 am ICT by IANS  

London, Jan 13 (Xinhua) Britain’s finance sector would lose about 15,000 jobs in the next two months as sharp fall in income and profit starts to take its toll, a new study has said.In a clear sign, the tightened credit markets are hitting the wider economy, it said. The amount of business conducted with manufacturers, retailers and other commercial firms shrank at a record rate, job losses were on the rise and investment plans were cut. Some 10,000 people have already lost their jobs since October.

The survey conducted among 87 companies by the Confederation of British Industry (CBI) and PriceWaterhouseCoopers (PwC) showed that almost two thirds suffered a fall in business in the three months to December.

Firms experienced falling business volumes across all their customer bases, but the rate of fall among industrial and commercial companies stood out.

Business sentiment fell further, as 45 percent said they are less optimistic about the overall business situation in the financial services sector than they were in September. Operating costs for companies have witnessed the fastest drop since December 1993 and are expected to fall further.

Training budgets were cut back at the fastest rate since mid 1992, whereas staff turnover declined more steeply, in a sign that fewer vacancies and worries about the recession may be deterring people from changing jobs.

Capital expenditure in land, buildings, vehicles, plant and machinery are expected to be lower in the next 12 months than in the past year.

Expectations were the lowest since mid 1992, and IT investment plans and marketing expenditure for the year ahead have also been pared back sharply.

John Cridland, CBI deputy director-general, Monday said: “2008 was the year the financial services industry would rather forget, and unfortunately it looks set to remain under pressure in early 2009. As income and profitability have tumbled, so there will be more job losses and cuts in investment, and stark implications for the rest of the Britain’s economy.”

According to him, flows of credit to the corporate sector remain constrained, and viable businesses are finding the availability and cost of credit very restrictive. “The shortage of trade finance is hitting many industries and businesses. The government will have to take further steps to tackle these critical issues.”

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