Thousands more City workers to lose jobs, says CBI
Banks no longer safe as houses
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The Confederation of British Industry (CBI) warned today that thousands of City jobs in the UK are set to be lost over the next three months.
Tumbling profitability, a slowdown in business negotiations in Blighty’s struggling financial services sector and a major dip in confidence about the current turbulent market conditions have all contributed to increase job fears in the City.
The CBI published the bleak findings in its latest quarterly survey, carried out with PricewaterhouseCoopers even before the collapse of Lehman Brothers, the rescue takeover of Merill Lynch and Washington’s $700bn bailout plan for US banks. The report covers leading UK High Street banks, building societies, insurers, securities groups and fund managers.
Business over the past three months has been sluggish at City firms, with only ten per cent reporting that their turnover had climbed during the period, while 61 per cent said it had fallen. It’s the biggest drop seen since the survey begun in December 1989, said the CBI.
Half of the financial houses that took part in the CBI survey reported a serious decline in profitability and predicted that worse was still to come.
“One year after the credit crunch first took hold, business volumes and profitability in the financial sector have taken their hardest hammering yet,” said CBI deputy director-general John Cridland. “Firms have become more fearful about the extent and length of the credit crunch and they are now looking to cut more jobs and scale back investment.”
The report coincides with today’s news that Bradford & Bingley PLC has been thrown a lifeline by the UK Treasury – which announced this morning that the bank had been nationalised, with the immediate loss of 370 jobs, and the promise of more cuts to come.
The government will transfer Bradford & Bingley’s retail deposits biz and branch network to Banco Santander-owned Abbey National.
The Treasury said it had sought "a range of private sector solutions" before bailing out the bank to maintain financial stability and protect customers and taxpayers, according to reports.®
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COMMENTS
Meantime Bank directors still get paid
Directors are still being paid for letting this happen.. this has to stop, or they will never learn
@AC 11:58
Just for the record here folks: I'm English, living and working in England and I don't work for a financial institution of any kind.
On a personal level, I'm inclined to agree with what you've said there AC: If anything, I think when we are looking for somebody to blame for this crisis, we might look to the millions of voters who re-elected George Bush at the last US election.
As regards mortgage security in the UK. I'm glad we live in a country which hasn't bought into the idea that everything can be solved by markets, and that the divine flow of money through unfettered capitalism is inviolate.
I think you rather missed my point about credit agreements, though. Credit agreements have binding terms, and in times of hardship, financial institutions are going to be much more stringent about enforcing those terms. If your mortgage lender goes under, one of things they might look to do to liquidate assets COULD BE to foreclose on borrowers who have violated their terms. I don't imagine that there would be much the welfare state could do about that, unless it is willing to underwrite the mortgage of every household in the UK.
The rise of the (self) righteous
Uh oh. It's starting to turn into "Have your Say" around here... It's becoming increasingly difficult to tell the Daily Mail readers from the Morning Star readers. United at last.
Yeah bankers are evil ! They eat babies you know ! Without paying for them ! Or cleaning up afterwards !
At least we haven't got any posts all in capitals yet.
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