and insurers respond to the global credit squeeze, said Experian Group Ltd., the world's largest credit-checking company. The capital's banking district, known as the City, "will bear the brunt" of financial job losses in the UK, which will total 40,000 by 2011, Nottingham-based Experian said in a report. The City employed 353,000 people in 2007, according to the London-based Centre for Economics and Business Research.
Banks and securities firms worldwide have cut about 65,000 jobs as losses and writedowns stemming from the collapse of the U.S. subprime mortgage market climbed to US$319 billion. With U.K. financial institutions paring lending in response to tighter credit markets, economic growth is slowing and Experian forecasts British employment levels will fall for the first time since 1992.
"Financial-services jobs are particularly vulnerable as the fallout from the credit crunch continues," William Thomson, director of international economics at Experian, said in the report. "The slowdown will bring the impressive run of job creation to a halt."
Royal Bank of Scotland Group Plc, Britain's second-largest bank, may cut about 7,000 jobs at its global securities and corporate lending unit following credit market and the takeover of ABN Amro Holding NV's securities unit, two people with knowledge of the plan said last month.
London's economic slowdown will close the growth gap between the southern and northern regions of the UK next year, the first time that's happened since 2002, Experian said Friday. Normally, the south grows about a percentage point faster than the north.
The UK economy will grow 1.8 percent this year and 1.5 percent in 2009, down from 3 percent in 2007, the report said.
Slower growth and higher credit costs are threatening to deepen a downturn in the housing market. UK mortgage approvals fell to the lowest level in at least nine years in March as British banks withdrew some of their best home-loan offers.
Experian said Friday UK house prices will fall 7.6 percent over the next two years. Prices in the West Midlands and the southwest of England will fall 10 percent by the middle of 2010, the report said. Values in southeastern and eastern England will slide 5 percent.
Claims to repossess homes by mortgage providers in England and Wales rose to 38,688 in the first quarter of this year, the highest since the first half of the 1990s, Ministry of Justice data showed Friday.
The market for luxury homes in London, the world's most expensive city for prime real estate, has stalled on the prospect of job cuts in financial services. Prices were little changed for a second month, with the average for houses and apartments costing more than 2 million pounds (US$3.9 million) rising 0.1 percent in April from a month earlier, Knight Frank LLP said this week.
