Summary
The Confederation of British Industry talks about further job cuts in financial services in the next quarter but should this be surprising? The forecast represents a fall in the rate of compared with Q1 and Q2 2009 and this at a time when a major banking merger in the UK is in progress.
Analysis
Not a week seems to go by without more job cuts in financial services being announced and much of that stems from the merger in Lloyds Banking Group of the former Lloyds TSB and HBOS businesses. Lloyds formerly employed 50000 people and HBOS 70000 and given the managements stated aim of cost savings the 7000 job reductions announced to date is probably only the start.
Also the new management at RBS will have been critically evaluating what they have inherited and that will probably lead to business closures and job losses, whilst Santander is bringing together Abbey, Alliance and Leicester and Bradford and Bingley under one brand.
Borrowing demand remains low in the UK and that can only lead to lower income and greater pressure on costs in the banks
With all of these factors in play, perhaps the surprise here is that the forecast is for the rate of job cuts to decline
