More Yuletide misery for the City
4 December 2012 12:08am
DECEMBER signals the advent of Christmas: a time for celebration, relaxation, and over-indulgence. But less so this year. The last 12 months have been terrible for those plying their trades in London’s Square Mile.
Those who still have a job should be grateful. The City has been butchered this year, and more than a few chickens (or turkeys) are coming home to roost. The Centre for Economics and Business Research (CEBR) estimates that the City has shed 11 per cent of its workforce since 2011, and will lose a further 5 per cent by the end of 2013. I’ve seen some tough years in the quarter of a century that I’ve worked in the markets, but this year certainly ranks among the worst.
Few of the talented people that I know – yes there are still one or two of them left in the City – will admit to making any money this year. They are suffering from one of the biggest liquidity droughts in decades. If they are making any money, they seem to be keeping a low profile.
December is also the start of bonus season, where City workers have been accustomed to picking up juicy rewards before they do their Christmas shopping. But the Grinch has well and truly stolen Christmas this year. The CEBR estimates that the bonus pool for City workers will fall by 35 per cent in 2012 to £4.4bn, down by over 60 per cent since the peak in 2008. And next year is likely to be worse, as the bonus pool is forecast to shrink to £1.6bn.
Why is it that when I speak to market strategists, they tell me they are rushed off their feet, and yet there is so little going on in the markets? I reckon the answer is fear of not being seen to be busy, at a time when the axe is falling.
This week’s Autumn Statement from our divided government will, once again, show how clueless it is in its quest to engineer growth. I cringe when I read about some of the rabbits that chancellor George Osborne is trying to pull out of his hat.
It looks as though the pick of Osborne’s inept policy ideas is going to be another raid on private pension contributions. Of course, lowering the tax free threshold for higher rate taxpayers below £50,000 will make the Liberal Democrats happy, but it will add explosives to the ticking pensions time bomb. Many middle-income earners will be hit, and it will hardly encourage more people to save for their retirement. Nice work Osborne.
I apologise for the miserable discourse, but I am struggling to see any festive joy this year for the City. Bah humbug.
Steve Sedgwick co-anchors Squawk Box Europe on CNBC.
In other news
Banks are finally starting to lend to Britain's small and medium sized businesses new data has shown, suggesting [Read more]
Just eight years ago, there was no iPhone, while a mere decade ago, half of all Britain's internet connections [Read more]
The nationwide rail strike, called off at the 11th hour last week, has been rescheduled for next week. [Read more]
Women's teams will feature on the forthcoming Fifa '16 video games - marking the first time women's football has [Read more]
Just a day after the Queen's Speech confirmed what we knew the Tories would have to do, a bill has dropped into [Read more]
Avago Technologies has sealed a $37bn acquisition of fellow semiconductor company Broadcom to create an industry [Read more]
Russian President Vladimir Putin has accused the United States of meddling in affairs beyond its jurisdiction [Read more]
The UK's GDP increased by 0.3 per cent in the first quarter of 2015, according to the latest figures from the [Read more]
Five people were arrested after the anti-austerity protest in Whitehall and Trafalgar Square turned voilent yesterday. [Read more]
Claire Perry has said “at times, the delays and disruption that are occurring are simply inexcusable.” [Read more]
Like electing a boss of Fifa whose surname isn’t Blatter or extracting an apology from Thomas Cook, reforming [Read more]
Britain's FinTech sector is a particularly bright spot in the UK’s recovering economy. Investment in London [Read more]
Currency volatility did Kingfisher no favours in the first quarter of 2015, but investors have not been put off. [Read more]
Power systems manufacturer Rolls-Royce has signed an €80m (£57m) contract with General Dynamics European Land [Read more]
Tool hire giant HSS saw its shares rise yesterday after reporting first-quarter trading in line with expectations.
Irn-Bru maker AG Barr announced yesterday that it plans to expand its state-of-the-art canning plant at Milton [Read more]