North expected to escape credit crunch job losses
Apr 1 2008 by Karen Dent, The Journal
EXPERTS say the North East will not be hit by the thousands of job losses forecast for the financial sector as the credit crunch worsens.
The CBI has predicted that at least 10,000 jobs could be lost nationwide in the next three months among people working in banks, building societies and insurance companies.
The CBI issued its grim forecast as it warned that the credit crunch would worsen in the next six months, although it believes the UK will avoid a recession. Liz Smith, assistant regional CBI director, said: “The CBI financial services survey covers the whole sector, across the whole of the UK and looks at trends on a quarterly basis.”
She said that although the loss of 2,000 Northern Rock jobs over the next three years would obviously hit the region’s economy, there were encouraging signs elsewhere in the financial sector.
“There is increasing evidence that the wider financial services sector in the region is relatively buoyant with currently around 1,100 existing unfilled vacancies for skilled staff.”
She pointed to the Newcastle Building Society’s plans to recruit 500 people in the next five years and the Darlington Building Society recently posting some of its best results.
Vinay Bedi, divisional director of Brewin Dolphin Newcastle, said: “We need to ring-fence the Northern Rock situation – in essence, it was a bank and it was because of banking legislation that exasperated the difficulties. I don’t think there is any question that our other building societies will be in any sort of difficulty.”
The stockbroker also said that call centre staff employed by the big four banks were unlikely to be affected. “The banks need to get more money in and so the call centres are likely to get more work,” he said. And Andrew Miller, regional head of investment managers Barclays Wealth, said: “Unlike London or Leeds, the financial services industry is not a major employer in the North East.”
Richard Slack, Newcastle Business School’s principal lecturer in accounting and finance, said that apart from Northern Rock, the sector was strong. But he added: “Business can no longer really fund aggressive growth policies because there is just not the money in the market.”
North East Chamber of Commerce spokesman Mike Parker also believes there is “an incredible amount of positivity” among the region’s financial services organisations.
