Job cuts likely in financial services

Link: CBI warns on damaging tax hikes

Released today, the CBI said the sector, which includes accountants, had shown a disappointing end to 2002, with business volumes dropping in the fourth quarter. Furthermore, the business lobbying group’s employment index showed a fall for the first time since March 2002.

As a consequence, employment is expected to fall sharply during the first quarter of the year.

John Hitchins, UK banking leader at PricewaterhouseCoopers, said: ‘The industry ended 2002 in a worried frame of mind, reflecting growing concerns about a slowdown in personal sector business and specific fears on the state of the housing market.

‘More jobs are likely to be lost in 2003 as firms grapple with their cost bases in the face of uncertain income prospects.’

Ian McCafferty, CBI chief economist, said 2002 had been a difficult year for many parts of the financial services industry, especially those affected by the performance of the stock market.

‘Across the sector as a whole, the sharp rebound reported in the April to June quarter prompted hopes that the industry would return to its more normal pattern of continuous expansion.

‘But subsequent surveys, including this latest snapshot, show that difficult conditions remain.’

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