The number of people employed in the financial sector has dropped significantly, falling at the fastest rate in over five years according to new research.
The Confederation of British Industry (CBI) and PricewaterhouseCoopers LLP quizzed a total of 79 companies, with a quarter of respondents admitting huge job cuts over the past quarter – the highest rate since March 2003. Banks tightening their belts include Lehman Brothers, Bank of America, Citigroup and Merrill Lynch.
The outlook appears bleak for many, according to the CBI, with employment expectations at the lowest since December 2002. Nine out of 10 firms fear the squeeze will not ease up within at least six months.
Chief economist at the CBI, Ian McCafferty, explained the vicious economic circle: “It is clear that the credit crunch has worsened over the first three months of this year. The interbank markets have become more gummed up, with banks even more unwilling to lend, and credit spreads have widened.”
McCafferty’s predictions for the coming year will not be much comfort for those in the world of finance. “We can expect further tough times in the financial sector, and as this feeds through into the wider economy it will inevitably be felt through slower economic growth this year and next,” he added.
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