(Adds details on rescue fund in fifth paragraph.)
Oct. 27 (Bloomberg) -- Employment in London’s financial industry may sink to the lowest in more than a decade on concern about the European debt crisis, tougher regulation and higher taxes, the Centre for Economics & Business Research Ltd. said.
Jobs in the capital’s City and Canary Wharf financial districts may fall to 288,225 at the end of 2011, 27,000 fewer jobs than a year earlier, the London-based research firm said today. That would be the lowest headcount since at least 1998, when there were 289,666 jobs. The CEBR had projected an increase for 2011 in April.
“London’s role as a key center in global finance is increasingly at risk,” Rob Harbron, an economist at CEBR, said in the statement. “With the possibility of further taxation and higher regulation constraining the relative desirability of London as an important financial center, the gap between the rising Far Eastern centers such as Hong Kong and Singapore continues to narrow.”
British banks face increasing regulation after the government-sponsored Independent Commission on Banking last month recommended lenders insulate their consumer-banking units, part of a plan to improve financial stability. The proposals may cost the industry as much 7 billion pounds ($11.2 billion), the ICB estimates.
Royal Bank of Scotland Group Plc in August announced 2,000 job cuts at its securities unit. HSBC Holdings Plc, Europe’s biggest bank, plans to eliminate 30,000 jobs by the end of 2013.
The CEBR also said the debt crisis in the euro area is taking its “toll on market activity and confidence.” European leaders, who met yesterday, persuaded bondholders to take 50 percent losses on Greek debt and boosted the firepower of the region’s rescue fund to 1 trillion euros ($1.4 trillion).
The CEBR estimates financial job levels in London will be little changed next year and in 2013, and may rise in 2014, 2015 and 2016 on expectations the euro region will recover. Employment peaked in 2007 with 354,134 jobs, the data show.
--Editors: Keith Campbell, Jon Menon.
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