U.K. Finance Jobs May Take Decade to Recover From Credit Crisis
Employment in London’s financial services industry may not return to its pre-credit crisis level for at least 11 years as taxes and regulation become increasingly onerous, the Centre for Economics & Business Research Ltd. said.
The number of jobs in the London’s financial districts, centered around the City and Canary Wharf, will climb to about 329,000 in 2012 from 319,000 in 2010, the research firm said. The total won’t return to the 354,000 employed in 2007 until 2021, the CEBR said.
Politicians, forced to bail out their nations’ banks, are turning on the industry worldwide. The International Monetary Fund this week called on the Group of 20 leaders to tax banks to help pay for future rescues. The plan could cut pretax profit at Europe’s lenders by as much as 20 percent, Credit Suisse Group AG analysts said yesterday. In December, the U.K. put a one-time 50 percent levy on bankers’ discretionary bonuses.
“Both the tax and regulation policy for the City are now up in the air,” Benjamin Williamson, one of the CEBR report’s authors, said in a statement. “There has been a move towards international agreements with respect to tax and regulation of the financial service industry. The problem is that some of the people behind such agreements will not necessarily have an economic interest in a healthy City of London.”
The CEBR said firms may add 14,000 jobs in 2010, compared with its October estimate of 9,000, as earnings rebound from the credit crisis.
Morgan Stanley, Goldman Sachs
“Large first-quarter profits announcements are expected over the coming weeks as institutions have taken advantage of record low interest rates and the fewer number of players in financial markets,” the CEBR said.
Morgan Stanley, which has its European headquarters in London, yesterday posted earnings that beat analysts’ estimates as fixed-income trading revenue more than doubled from a year earlier. Goldman Sachs Group Inc., which has its office on London’s Fleet Street, said April 20 that net income almost doubled in the first quarter.
Some London banks have started hiring bankers to replace employees they cut during the credit crisis. Lloyds Banking Group Plc, the lender 41 percent-owned by the U.K. government, plans to employ more sales and trading staff. Barclays Plc, the U.K.’s second largest bank, has also been adding mergers bankers at its securities unit as the pace of takeovers increases.