The number of new jobs in the City of London fell 20 per cent year-on-year last month, figures have shown.
Recruitment agency Astbury Marsden said that the number of new vacancies fell from 5,030 during August 2010 to 4,030 last month amid ongoing uncertainty over financial markets.
Mark Cameron, chief operating officer at Astbury Marsden, highlighted how disappointing quarterly banking results had affected the number of new jobs being created.
He said that this summer had seen a more-severe recruitment slowdown than usual, adding: “There have been disappointing second-quarter trading results across all the main investment banks as the effects of the US debt and euro zone crises and general market jitters continue to take hold.”
The situation saw the scaling down of recruitment at banks and other financial services businesses – such as wealth management firms – over the summer, something which Cameron links to the way bonus payments have changed since the recession.
He added: “It had been far easier for banks and hedge funds to respond to a blip in revenue by simply reducing the amount in the bonus pool. The current City pay structures – which introduced higher base salaries to counteract lower bonus payments – have meant that City firms looking to lower costs have little option other than to reduce headcount.”
Cameron estimated that around 12,700 people are looking for work in the City. This is compared to a figure of 12,150 for 12 months earlier.
However there was still a far greater number of new jobs created last month than in September 2008 – when Lehman Brothers collapsed and the monthly total fell to fewer than 2,000.
Cameron added: “We are expecting some improvements, albeit not dramatic, during September and through to the end of October as banks and other City firms revert to a degree of normality and start to prepare for 2012.”
However despite the fall, people working in regulation and risk are still in high demand ahead of regulatory changes in the wake of the Independent Commission on Banking’s concluding report – published on Monday.
The ICB report called for banks in the UK to ring-fence their high street and investment divisions in a bid to create a protective firewall. The move was urged under reform plans, expected to be active from 2019.
Sir John Vickers and his fellow ICB members said the proposals will “put the UK banking system of 2019 on an altogether different basis from that of 2007”.