Britain’s economy relies, in this post-industrial age, largely on two major sectors; the first being the government sector, which contracts services to private companies, and the second being London’s financial services industry.
This week, the Morgan McKinley employment monitor which tracks vacancies in the financial sector has reported a 37% decrease in professional opportunities, whereas according to official figures, the number of professionals seeking new jobs in December rose by 51% per cent while those who secured new roles saw their salaries increase by an average of 18%.
London continues to host the vast majority of the world’s institutional FX firms, whilst the banks of Canary Wharf and the Square Mile handle a vast proportion of global interbank FX order flow, however, as noted in a LeapRate editorial recently, London’s electronic trading sector holds significant kudos with international clients, rather than the jaded British public who have had their investing wings clipped and optimism curbed by 7 years of prolonged recession and economic struggle.
As the FX industry accelerates and London’s plate glass institutions get ever stronger, the British domestic economy just one mile outside of the Square Mile in each direction, spanning the entirety of the nation, paints a totally different picture and is subject to totally different circumstances.
Since 2008, small and large businesses, and even the very same banking institutions whose FX businesses are the mainstay of the entire global currency markets, have experienced bankruptcies, credit difficulties and contractions in size to a fraction of their former selves, with no sign of improvement.
Since the British government nationalized the major banks seven years ago, the economy has not recovered, partly due to Britain’s dependence on tertiary sector such as financial markets, insurance, and telecommunications rather than having a diversified manufacturing base which provides wealth outside of London’s financial district.
Thus, with the financial sector being such a large contributor to the UK economy, mostly due to vast global order flow and partners introducing business to liquidity providers in London from across the entire world, any difference in activity is enough to have a major effect on Britain’s wider economy.
According to ThisIsMoney.co.uk Director of Morgan McKinley Hakan Enver said: “While the seasonal dip hit a little earlier, hiring activity also slowed due to wider concerns about a fragile UK recovery.”
“While there is some caution in the market, we believe the overall growth trajectory of the past 12 months will continue into 2015” he concluded.