UK banks set to axe thousands

UK - More layoffs could be in store for finance professionals in the UK as business volumes and profitability continue to slide at an alarming rate.

According to a quarterly survey published yesterday by the Confederation of British Industry (CBI) and PricewaterhouseCoopers, job losses in the financial sector will total about 12,000 in the fourth quarter of 2008. Around 44% of 92 financial-services firms, including 17 U.K. banks, expect to cut jobs over the next three months, up from 19% in the previous quarter.

While the financial-services industry currently employs about a million people, the credit crunch has taken a toll on the companies' resources. "Firms have become more fearful about the extent and length of the credit crunch, and they are now looking to cut more jobs and scale back investment," John Cridland, the CBI's deputy director-general, told Wall Street Journal.

The survey also showed that 59% of respondents were pessimistic about their business situation with majority of firms citing declining transactions with overseas customers such as industrial and commercial companies as a huge factor. This is affirmed by 49% who predicts further shrinking of profits in the coming months.

Likewise, companies in the insurance, fund-management, securities and building-society sectors are feeling the gloom with 99% of respondents expect "no return to normal market conditions in the next six months".