BANKS may cut 62,000 jobs in London by the end of next year, reducing employment in the industry to the lowest level in more than a decade, the Centre for Economics and Business Research said.
Firms would eliminate 28,000 jobs in the City of London this year and 34,000 next year, the CEBR said in a report released yesterday.
The cuts would reduce the number of people employed in the industry to 290,847, the lowest since 1998, according to Bloomberg News.
The credit crunch ''has spread through global markets like a virus and threatens to plunge the world into recession,'' said Richard Snook, the CEBR's senior economist. ''We therefore do not expect a quick return to the levels of employment and prosperity that the city saw in 2006 and 2007.''
Banks worldwide are shelving deals and cutting employees as the turmoil in credit markets spreads. European stocks tumbled last week, with the benchmark Dow Jones Stoxx 600 Index posting its worst week on record. HSBC Holdings Plc, Europe's largest bank by market value, was cutting about 550 jobs in the United Kingdom, and Zurich-based UBS AG said it would eliminate 2,000 positions in its European investment banking unit. About half of the city's 15,000 corporate finance jobs would disappear by the end of next year as mergers and acquisitions slowed, the report said.
Companies have announced US$1.2 trillion of takeovers in Europe this year, down 25 percent on last year.