London can expect to lose this year its statute of the most important global financial center, due to redundancies in the City, a decrease in bonuses and competition from other financial centers, led by New York, Hong Kong and Singapore, according to a study.
By 2015, explosion of jobs in Hong Kong will push London in third place in the league of global financial centers, according to a study by the Centre for Economics and Business Research (CEBR) in Britain, quoted by The Guardian.
The analysis brings other, immediate, bad news to London bankers, suggesting that cumulative bonuses this year will fall to 4.4 billion pounds from 6.75 billion pounds in 2011 and 11.56 billion pounds in 2008.
The increase of the number of jobs in the financial sector in the Far East will be so great that in three years the difference between the size of the financial workforce in London and the one in Singapore will be insignificant, the institute predicts.
Chief Executive of CEBR, Douglas McWilliams, painted a grim picture of the consequences of the British economy, insisting that “the biggest loser will be the British tax system.”
“Given the lost income due to problems in the City, lower level of income tax, stamp duty and other lower taxes, the estimate for the revenues from the City, in the current financial year will be about 40 billion pounds, compared with 70 billion pounds collected in 2007/2008,” said McWilliams.
The British government has the difficult task of defending the position of London as main global financial center and a major contributor to budget revenues, while trying to balance the economy.
CEBR estimates come after last week the institute predicted that the number of jobs in the City district will drop next year to 237,036, the lowest level since 1993.
The number of persons employed in the financial sector in London, excluding most accountants and lawyers declined this year by 11% comparing to 2011, just under 250,000. Before the global financial crisis, the City district employed more than 350,000 people.
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