UK financial services firms to cut 18,000 jobs

Business volumes declined.

New Statesman
A job centre in North London. Credit: Getty Images.

The UK financial services companies are likely to cut a further 18,000 jobs by the end of April 2013 despite positive business environment, according to the latest CBI-PwC survey.

During the fourth quarter of 2012, business volumes grew in insurance and investment management area, however, banking and securities trading declined. The survey, which questioned 94 UK firms, found that 25,000 jobs were cut during the last quarter to December.

Matthew Fell, director for competitive markets at the CBI, said: “It’s encouraging that firms are more optimistic about their business situation than they were last quarter. However, there is rising concern that staff shortages are likely to limit business and investment over the next year, as well as the challenge of raising finance.”

In a separate survey recruiter Astbury Marsden, found that the proportion of City workers not expecting a bonus this year had doubled to 22 per cent from 11 per cent last year.

Hakan Enver, operations director at Morgan McKinley Financial Services, told the Financial Times: “From speaking to those with hiring responsibility across the sector, there is expected to be a significant amount of recruitment activity likely to take place during January.”

The City jobs market had been more subdued in 2012 than in 2011, Enver said.

“Rather than anticipating a sudden surge of growth in hiring as we did in 2010, we now identify consistency as a key determinant of the financial services jobs market moving forwards – although at a slower and more fragile pace,” Enver added.

In its report, Incomes Data Services (IDS) said that average public sector managers’ pay was likely to rise by just 0.7 per cent, lower than the 1 per cent annual cap on public sector pay growth announced by George Osborne, the chancellor. It expects private sector managers’ pay awards to average 2.6 per cent, reported the Financial Times.