The UK financial services sector has slashed jobs as income and business levels have fallen sharply and is set to make more cuts, says the Confederation of British Industry (CBI).

The UK financial services sector has slashed jobs as income and business levels have fallen sharply and is set to make more cuts, says the Confederation of British Industry (CBI).

In the next three months, the sector may shed a further 15,000 jobs, with 26,000 having already been slashed in the previous two quarters.

The CBI says the industry has cut jobs at the fastest rate since 1993, with a survey by the organisation finding that 40 per cent of financial firms have reduced their head count.

Ian McCafferty, CBI chief economic adviser, says: ‘Conditions remain exceptionally tough in the financial services sector, and have not been helped by equity markets having fallen further since our last survey in December.

‘Sharp drops in revenues and profitability are causing continued suffering, while business volumes remain very weak. Firms are making heavy cuts to staff numbers and investment plans to make savings and reflect weak demand.’

Of the 90 firms surveyed between February and March, some 47 per cent reported a decline in profitability, reflecting a slight easing back from December’s record drop of 55 per cent.

However, business sentiment dropped again, with 34 per cent of firms saying they were less optimistic about the overall business situation in the financial services sector than they were in December.