The City of London jobs machine is stalling, according to a survey by the recruitment firm Astbury Marsden. It says that some 35,115 new City jobs were created in 2012, down from 52,025 in 2011, representing a 35 per cent decline.
The banking sector has been battered by a succession of scandals over the past 12 months, from manipulation of the Libor interest rate, to revelations of money-laundering, to payment protection mis-selling, which have depressed profits. Firms have also been forced to retrench by regulatory pressure.
"Tighter regulation, including higher capital requirements, forced up costs at a time when revenues dipped due to a number of factors including a continued weak economy and less trading activity," said Mark Cameron, chief operating officers at Astbury Marsden. "Although broad cost-cutting is typical in the City during a downturn, 2012 was particularly significant as senior management in banks took very decisive action and implemented major structural changes, including winding down entire units".
The Centre for Economics and Business Research has forecast that the number of City jobs will fall to its lowest level in two decades next year. There were 800 new City jobs created last month, compared with 1,490 in December 2011, according to the Astbury survey.
UBS, Credit Suisse and Deutsche Bank announced job cuts last year,