Up to 20,000 City jobs will go in London over the next two years as a result of the credit crunch, economists warn.
The Centre for Economic and Business Research (CEBR) has downgraded its City forecast, expecting 11,000 job cuts in 2008 and a further 8,200 to be axed in 2009.
It says the current credit crunch and global downturn will inflict worse losses for the City than the dotcom crash, which cost 15,300 jobs.
CEBR predicts the number of jobs reliant on the City will fall from 351,000 last year to 334,000 by 2009. It also says 2007’s employment level is unlikely to be fully recovered until 2012.
Last week Fidelity announced it may cut up to 170 jobs in London, while the Royal Bank of Scotland is set to shed 200 employees and Citigroup is expected to axe 2,000 across its UK and US operations.
CEBR economist Richard Snook says the “breakneck expansion” of City jobs since 2002 will come to an end this year.
“The finance sector is currently engulfed by bad news stories; billions have been lost on asset write-downs, the credit crunch has made it more difficult for banks to secure funds and activity in profitable sectors like mergers and acquisitions has ground to a halt,” he says.
“Combined with the sharp slowdown in the UK and world economy, this means that substantial job losses are now inevitable.”
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