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UK financial services firms to cut 18,000 jobs

Business volumes declined.

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.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.