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U.k. Hires Fewer Bankers As Credit Contagion Spreads

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March 14 (Bloomberg) -- London's financial services companies hired fewer bankers and cut salaries last month as contagion from the U.S. subprime mortgage market spread to Europe, a survey found.

The number of new job vacancies dropped about 9.6 percent in February compared with the same month in 2007, London-based recruitment consultant Morgan McKinley said in its monthly report today. Average salaries in the financial services industry fell about 2 percent to 50,119 pounds ($102,057) in February from the same month last year.

Surging U.S. home loan defaults have pushed up borrowing costs, threatening the global economy and causing about $188 billion in asset writedowns and credit losses at the world's largest financial institutions including Morgan Stanley, Lehman Brothers Holdings Inc. and Citigroup Inc. Wall Street firms have fired more than 30,000 employees in the past seven months.

``There are many people living with the delusion that this is a temporary event,'' said Peter Hahn, a former managing director at Citigroup and fellow at City University's Cass Business School in London. ``Jobs in financial services are going to drop significantly.''

New York-based Lehman, the largest underwriter of mortgage- backed securities, is eliminating 5 percent of its workforce, a person briefed on the plan said on March 10. Citigroup, the largest U.S. bank, eliminated 4,200 jobs in January after reporting a record fourth-quarter loss of $9.83 billion.

U.K. Slowing

In the U.K., economic growth may slow to a range between 1.75 and 2.25 percent this year, Chancellor of the Exchequer Alistair Darling forecast on March 12.

The number of bankers looking for new posts fell 7.3 percent in February from the previous month, when individuals ``tested the temperature of the jobs market pre-bonus payouts,'' Morgan McKinley said.

Bonuses for the 1 million people working in Britain's financial services industry surged last year after a 45 percent jump in the value of European mergers to about $1.6 trillion, according to data compiled by Bloomberg. European deals so far this year total less than $300 billion.

Falling wages.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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