Credit crunch follows job loss fear
Economic slowdown, persisting problems in the banking sector, reducing bonuses and the falling profits rates of the business concerns have posed severe concerns regarding the future of the UK financial sector. The experts have been estimated huge cuts in jobs following the volatile nature of the market. According to CEBR, centre for economic business research, the total number of job losses would be near about 10,000 in the current year. This prediction is somewhere around 50 percent more than what was estimated three months back. According to the various experts the upcoming months would be very crucial in deciding the fate of the financial sector.
According to the survey taken over by PricewaterhouseCoopers and CBI, the financial sector would be terribly bitten by the credit crunch that is arising. The survey reveals that the financial sector would be facing the worst ever period since the last five years. These are accompanied by speculations of the problems persisting till the end of the year. The problems gravitated after the FTSE 100 index slumped down by about 5.5 percent in January this year.
This fall in the FTSE index has been one of the worst in the last six years with a loss of 100 points. The fear of job loss is also because of the failures of Northern Rock to refinance the mortgages in the money market along with its nationalization in the early part of the year. Northern Rock was followed with the collapse and takeover of the Bear Stearns, one of the largest investment banks of the US.
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