Bloomberg News

U.K. Financial Firms’ Confidence Drops, to Cut Jobs, CBI Says

October 02, 2011

Oct. 3 (Bloomberg) -- U.K. financial services firms’ may cut 8,000 jobs as optimism on the outlook for trading fell for the first time since March 2009, according to a survey by Britain’s biggest business lobby group.

“After a torrid couple of months on global financial markets, the mood has clearly darkened,” Ian McCafferty, chief economic adviser at the Confederation of British Industry said. “Uncertainty about future demand, worries about the general recovery and shifting regulatory sands are weighing on sentiment.”

The survey found 20 percent fewer respondents said they were more optimistic about overall business than three months ago. The jobs losses may occur in the next three months, the CBI estimated.

HSBC Holdings Plc, Europe’s largest bank and Royal Bank of Scotland Group Plc in August said they planned to cut 30,000 and 2,000 jobs respectively. Barclays Plc said it would eliminate about 3,000 roles and Lloyds Banking Group Plc said it plans to lose 15,000 jobs. Market strains related to the euro-area debt crisis have dented the outlook for bank earnings and may impede their ability to strengthen balance sheets, the Bank of England’s Financial Policy Committee said in a Sept. 28 report.

“I would attribute more of this short-term swing in confidence to the markets and uncertainty about the economy, McCafferty said. Companies have shown concern about regulation for the last four years,” he said.

The CBI and PricewaterhouseCoopers LLP, which helped compiled the report, surveyed 84 banks, insurers, customer-owned lenders, investment managers and securities firms from Aug. 23 to Sept. 8.

--Editors: Jon Menon, Steve Bailey

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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