View more on these topics

JP Morgan says 40,000 City jobs will go

JP Morgan predicts 40,000 City jobs will be lost over the next two years because of the credit crunch’s impact on the financial services sector.

The prediction was made in a JP Morgan report published last week entitled Europe equity research and doubles the job losses estimated by the bank in December.

In the report, Harm Meijer, analyst for JP Morgan, says: “We’ve seen an initial 10% reduction in banking staff so far in 2008 but we believe we’re likely to see more severe cuts during the rest of the year.”

The number dwarfs the Centre for Economics and Business Research’s estimate that up to 20,000 City jobs will be lost in the next two years.

The CEBR warns that the 2,000 job cuts made by Citigroup recently are just the tip of the iceberg.

A CEBR report entitled London and the City prospects predicts the economic slowdown will be so severe that the employment levels seen in the City last year are unlikely to be reached again until 2012.

It expects the credit crunch to have a worse impact than the dotcom crash, which raged from March 2000 to October 2002. The crisis in the new media industry cost 15,300 jobs.

The report states that unlike the dotcom crash, areas of the economy such as housing and consumer spending won’t support growth as the credit crunch continues.

Richard Snook, economist at CEBR, says: “The breakneck expansion of City jobs seen since 2002 will come to an end this year.”

The CEBR’s bleak forecast emerged on the back of a report last month from the Confederation of British Industry, which predicted there will be up to 11,000 job losses in the financial services sector this year.

The CEBR and CBI reports suggest the financial services sector will be mauled by the credit crisis. The former predicts that corporate finance, investment banking and derivatives will suffer most.

But Peter Gwilliam, director of Virtus Search, says the figures are scaremongering. He suggests the job losses are the acceleration of a natural trimming of the market that would have happened regardless of the crisis.

He says: “The industry has become fat and thanks to technological innovation and a number of loss-making products it needed to slim down.

“The world of the 3% proc fee could not continue when the life of the average mortgage is two years and nine months.”

He adds: “Any business facing a 35% to 40% reduction in revenue must cut costs and staff are part of that.”


Free leads on Mortgage Next’s packaged business

Mortgage Next is offering brokers a free mortgage lead for every mortgage case which is put through its packaging department. The scheme applies to all packaged business and will work on the basis of one free sub-prime lead being credited on completion, which will then be issued in bundles of five leads, to intermediaries, by […]

ERC rated number one for equity release

Equity Release Club have been ranked number one out of 22 listed mortgage clubs offering equity release including Premier Mortgage Service, Legal & General, and The Mortgage Alliance.

Good news for TFC Homeloans

TFC Homeloans reports an increase in business volumes of around 30% in the past month. The lender, part of the Orbiter Group, says applications have risen by nearly 90% since December 2007.

HomeLoan Partnership’s sales show healthy increase

Worthing based mortgage network, HomeLoan Partnership, is embarking on a round of business development forums in Manchester and Crawley this month as sales increase.Martin Cave, managing dircetor at HomeLoan Partnership, says: “March 2008 mortgage sales matched the same period last year and insurance sales showed a healthy increase. We continue to add new initiatives to […]

Frexit & contagion risk in Europe

Many commentators have suggested the UK’s exit from the European Union will trigger a domino effect, leading to its eventual break-up. Neptune Head of European Equities Rob Burnett discusses the likelihood of this happening. Click here to read more Important informationInvestment risks Neptune funds may have a high historic volatility rating and past performance is […]


News and expert analysis straight to your inbox

Sign up