Bloomberg News

U.K. Banks Plan to Cut Jobs as Hiring Intentions ‘Collapse’

September 13, 2011

Sept. 13 (Bloomberg) -- U.K. banks plan to cut jobs over the remainder of the year, according to a report today, which may further undermine the faltering economic recovery.

A measure of financial employers’ hiring intentions for the fourth quarter fell to minus 5 from plus 3 in the previous quarter, the U.K. unit of recruitment firm Manpower Inc. said in London today. That’s the lowest since the survey started in 2005 and reflects a “collapse” in bank hiring, it said.

Royal Bank of Scotland Group Plc, HSBC Holdings Plc and Barclays Plc last month announced plans to eliminate about 35,000 positions as the biggest global banks cut jobs at the fastest pace since 2008. The moves undermine U.K. Chancellor of the Exchequer George Osborne’s plan to get companies to create enough jobs to compensate for the 330,000 public-sector posts he is eliminating as the government reduces the budget deficit.

“Six months ago it looked like the banks were going to lead the way out of recession and could even have filled the hole created by the slowdown in the public sector,” Manpower U.K. Managing Director Mark Cahill said in the statement. “The finance sector was hiring like nobody’s business, it was consistently the most optimistic sector post-recession, but this has now fallen away quite dramatically.”

European bank shares have fallen about 34 percent in the past three months on concern the euro-area debt turmoil will become a banking crisis and as the global economy cools. London’s FTSE-350 Bank Index has dropped 25 percent in the same period, compared with a 19 percent decline by the Stoxx 600.

London Falling

A measure of hiring intentions in London fell 6 points from the last quarterly survey to zero, indicating there was an equal number of employers planning to increase and decrease staffing levels over the next three months, Manpower said. The decline was driven by the capital’s dependence on financial services for employment, it said.

Manpower, the world’s No. 2 provider of temporary workers, said its index for all industries fell 1 point to 2, the first decline since the second quarter of 2009.

The report, based on responses from 2,100 employers, also showed that jobs may be cut in the hotel and retail industries, as well as in construction. A measure of business services’ hiring plans was at 8, while the gauge for utilities was at 10.

Manpower said Britain is “split in half” in terms of hiring intentions, with employment prospects in many parts of north England and Scotland “looking increasingly bleak” and the south “broadly positive.”

A separate report from the Royal Institution of Chartered Surveyors today showed their U.K. house-price index was little changed in August and an expectations gauge dropped. The number of real-estate agents and surveyors saying prices fell last month exceeded those seeing gains by 23 percentage points, compared with 22 percentage points in July. A price expectations measure fell to minus 23 from minus 13.

--Editors: Fergal O’Brien, Alan Crawford

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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