Despite signs of green shoots elsewhere in the economy the City continues to struggle, causing many leading firms to re-examine their cost bases according to the Centre for Economics and Business Research.
Equity trading has suffered, with volumes on the London Stock Exchange and Alternative Investment Market down by around 20 per cent year-on-year. Perhaps more worryingly, the international order book on the London Stock Exchange has fallen even further, completely reversing last year’s trend.
Meanwhile turnover in the secondary market for gilts has plummeted, as the Bank of England now owns much of the stock.
Even currency trading – which grew by around 25 per cent in the twelve months to April 2011 – has fallen back this year.
But the main concern remains M&A activity. The value of domestic deals, which showed signs of a small recovery in 2010, fell by a more than 35 per cent last year and is set to keep falling.