City will drive Britain out of the recession

FINANCIAL services will be at the heart of the economic recovery this year, an academic research group said today.

Along with Britain’s resurgent manufacturing sector, “growth in 2011 will be driven by financial and business services and by computing services,” Cambridge Econometrics found. Banking and finance will stimulate growth in several key business services, it said.

“We expect financial and business services to account for larger shares of value-added and employment than it did in 2007,” it said.

And the private industry will more than make up for job losses in the government sector, it said.
“Between 2010 and 2015 we expect employment in the public sector to fall by just over 400,000, and employment in the private sector to increase by more than 700,000,” the report said.

However, the group warned that the labour market faces a “bleak” year, before recovering from 2012 onwards.