City job numbers return to dot.com levels

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The Independent Online

The City could see job numbers back up to dot.com boom levels next year, a survey published yesterday has found. Jobs in London's financial services industry are rising steadily thanks to a rebound in merger and acquisition activity, the Centre for Economics and Business Research says.

The City could see job numbers back up to dot.com boom levels next year, a survey published yesterday has found. Jobs in London's financial services industry are rising steadily thanks to a rebound in merger and acquisition activity, the Centre for Economics and Business Research says.

The Square Mile's payroll is forecast to average 320,000 this year, up just over 4,000 from last year, and rise to 325,000 in 2006 - topping the previous peak of 324,000 in 2000, the height of the internet stock boom. Employment levels are expected to keep rising by 4,000 to 5,000 a year, to reach 339,000 in 2009.

Andrij Halushka, an economist at the CEBR who co-authored the report, said: "Although the stock market has been flat so far this year, activity levels in the City are improving thanks to innovation in areas such as derivatives and a rebound in merger and acquisition work."

Employment in the City fell sharply as banks slashed jobs when the internet stock bubble burst after 2000. City jobs hit a low of 305,000 in 2002, according to CEBR figures. Banks' payrolls have been recovering since then, but the City has not seen a return to the frenzied hiring of 1999-2000 when M&A and stock market activity reached record levels. Some banks, such as Deutsche Bank and Commerzbank, have recently cut jobs in London.

Fund management has been adding jobs at a faster rate than any other part of the international financial sector in London on the back of growth in hedge funds. However, hedge funds suffered serious setbacks this spring and the weaker ones are struggling. Fund management will see jobs growth this year of only 1.5 per cent, leading to 40,000 jobs, the CEBR says.

Corporate finance saw modest jobs growth last year after the M&A market slowed in the second half, but hiring is expected to pick up this year at 1.4 per cent growth to 13,000 jobs. Securities jobs are predicted to grow 2 per cent to 81,000. Professional services is expected to expand at 1.3 per cent to 76,000.

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