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10 January, 2012 02:05 (GMT +00:00)

10,000 jobs set to be cut in financial services

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By Paula Planelles Manzanaro

The Eurozone crisis is threatening financial services in London, with anticipated losses of more than 10,000 jobs over the next three months. Also, a report
by Lloyds TSB Commercial informs that the confidence among British businesses is at its lowest level in for more two years.

Last year the loss of jobs’ figures rose up to 9,000 in the final quarter, according to the financial services survey from the CBI and PwC. The report
concluded that 81,000 jobs have been cut in this sector since the collapse of the US investment bank Lehman Brothers in September 2008.

The beginning of 2012 does not seem to be more hopeful. More than 10,000 jobs in the financial services sector are expected to be shed due to the Eurozone
economic crisis and the new regulatory rules over the market.

One of these new regulatory changes that could be imposed is the new financial transaction tax, also known as the Tobin tax, which France and German are
trying to levy over the EU despite the opposition of the British Prime Minister David Cameron.

According to Kevin Burrowes, UK banking leader at PwC, “regulatory changes will also absorb significant management time, and spend on this will be very throughout the year. Further job losses across the sector seem inevitable as banks seek to manage their cost base”.

The figures related to business volumes are more positive with growth being recorded in the last quarter for the three months to December, according to a
report in The Times. Ian McCaffterty, chief economic adviser at CBI, states that “this has been a strong quarter for the financial services sector, with increases in sales volumes and profits showing that the sector’s recovery is on track”.

However, Mr. McCafferty also considers that the lack of confidence among the British businesses, also mentioned by the Lloyds TSB Commercial’s report, and
the increase of out-of-work Britons are threatening financial services. Actually, the unemployment figures in the country are at their highest level 1994. New figures will be published next week by The Office for National Statistics, showing an increase of the number of unemployed Britons in the three since months to November and reaching 2.64 million, the article published by The Times informs.

The British market needs to look for solutions to fight against the negative sentiment in businesses in the country. “To break the cycle of dwindling
confidence leading to slower growth, it is crucial that firms do whatever they can to maximize opportunities, at home or overseas”, John Maltby, group director of Lloyds Banking Group Commercial, said.  According to Mr. Maltby, the British businesses need to set up new export strategies outside Europe in
order to boost the trade.

Local solutions are needed to act globally if the country wants to get over the economic crisis damaging the market interests.


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