City jobs to hit six-year highs, says think-tank

Click to follow
The Independent Online

Jobs in the City will swell next year to the same level last seen at the peak of the "dot.com boom" in 2000, a survey found.

Jobs in the City will swell next year to the same level last seen at the peak of the "dot.com boom" in 2000, a survey found.

The study, by the London-based Centre for Economics and Business Research, concluded that the prospects for the City were improving, reflecting a relatively optimistic outlook for the world economy.

The CEBR forecast 325,500 people will work in the financial services industry next year, rising to 328,500 in 2007 - up from an estimated 321,000 this year. Employment in the City has risen steadily in recent years as banks and insurers continue to hire.

The study found that fund-management companies were hiring more than any other financial sector, and were expected to add 1,000 jobs this year, up 3.1 per cent from last year. The number of corporate finance jobs grew2.5 per cent, while securities firms were forecast to add almost 2,000 jobs this year - up 2.2 per cent - on the back of improving stock markets.

Andrij Halushka,one of the report's authors, said: "The relatively strong global economy is the reason why we see the number of City-type jobs expanding at a steady rate, reaching 340,000 by the end of this decade. We are more upbeat about the immediate future, but we expect that offshoring of financial services jobs will pick up by the end of the decade."

HSBC and Lloyds recently announced they are offshoring thousands of call-centre jobs to India.

The CEBR raised estimates for average annual job growth in the Square Mile in the years up to 2009 to 1.8 per cent from 1.5 per cent. This was good news for other parts of the London economy that depend on the City - especially the housing market, which has slowed after five interest rate rises in the past year.

Mark Pragnell, the managing director of CEBR, pointed to risks that could undermine the prosperity of the City.

"The most important is the risk of a crisis developing in world financial markets as a result of distressed selling of positions by leveraged investors such as hedge funds." Another risk was a sharp fall in the pound, he said.

Comments