Record low in finance sector jobs

A leading survey has shown that employment throughout the financial services sector will hit a record low in the first quarter of 2011 after profits failed to meet expectations.

The report released by the employers’ group CBI and PricewaterhouseCoopers (PwC) revealed that financial services jobs were cut at the fastest rate in 17 years in the third quarter of 2010.

Researchers are claiming that around 30,000 positions were lost after a balance of 49pc of firms revealed that the headcount had dropped. Expectations show that another 15,000 are likely to go in this first quarter of 2011, which would increase the headcount to about 970,000 – the lowest since records first began.

Typically, employment in the sector maintains a steady position just above the 1m mark and although it peaked to 1.1m in 2008 it dipped below the 1m mark at the beginning of 2010.

The CBI revealed the businesses were cutting back on jobs at a fast rate, despite the fact that the sector was still in the midst of recovery. Volumes in business did in fact grow quite strongly though it is believed that it was driven by private individuals, which in turn was thought to be a sign of households’ grasping at financial gains.

The firms came under pressure, however, as slow growth in profitability forced them to cut costs.

Meanwhile, another report revealed that jobs market weakness will prevent inflation from spiraling, despite the fact that price expectations continue to be high. Accountants BDO stated that employment was suffering from a seven-month low in the month of December last year, which is expected to curb the demands for pay increases and the knock-on effects to prices.