It’s hard to be positive

With the number of bulge bracket banks shrinking ­ Merrill Lynch is of course
poised to fall to Bank of America ­ the corresponding decline in the number of
audit contracts will further threaten jobs at the Big Four in the US. Deloitte
looks the likely loser on the audit front.

And with both banks home to sizeable London operations, the effects have
already crossed the Atlantic. PwC London is working on the administration of
part of Lehman’s European operation, which is thought to employ as many as 5,000
people in London.

It’s not all about the capital. Accountancy Age has been talking to
UK firms about how the credit crunch is affecting them and their clients.
Overall the picture, to be revealed in our supplement Best Practice next week,
wasn’t pretty.

Nevertheless there were pockets of confidence among companies and their
advisers. Some leisure activities, such as cheaper restaurants and pubs and
hairdressers, are seeing an increase in activity; some regions, such as the
tourist-related business in the south west, have had a good summer; and some
tiers of business, including the trading conditions for many SMEs, are

Overall though we have found more gloom than boom. That in itself, of course,
contributes to successful service lines, not least insolvency. Other advisers
are confident spring will deliver metaphorical green shoots as well as real

But every Lehman-type development requires several times its weight in
positive news just for equilibrium to be maintained. And, this week at least,
it’s hard to see where that is going to come from.

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