December 2, 2013 6:55 pm

Few cheer as City gets its mojo back

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The UK economy is still a long way from rebalancing

Are good times rolling again in the City? News of an upturn in hiring, coming on top of an increase of more than one-third in top bankers’ earnings, will be too much for many people. “An obscene gravy train”, commented one Financial Times reader.

It is another indication that the UK economy is still a long way from rebalancing in favour of exports, industry, investment and jobs outside London – though manufacturers are finally hoping for above-average growth next year after strong survey data on Monday.

A few caveats. The 2,500 new City vacancies in November recorded by recruiter Astbury Marsden – up 6 per cent on October and 38 per cent on the same period last year – are so far just one indicator. Vacancies in October were almost a third below their 2007 peak, according to Morgan McKinley, another recruiter. By some estimates, the City lost 30 per cent of its jobs between 2007 and 2012.

UK-wide, finance and insurance, which employ 1.1m, have lost 85,000 jobs since 2008. Thousands more job cuts loom at Barclays and the Co-operative Bank. The London and southeast labour market may be buoyant – it accounted for more than half the 378,000 increase in people employed across the country over the past year – but that is much broader than finance.

It may be, though, that a more confident stock market, a surge in initial public offerings and a rise in mergers and acquisitions is feeding through into City jobs. The UK needs a healthy financial sector, not just as a big employer and export earner but as the conduit of finance to help businesses to grow. The performance on that remains very mixed, however.

Banx cartoon

And scandals keep coming. The latest is the claim that Royal Bank of Scotland killed off healthy businesses. On top of bankers’ alleged rigging of foreign exchange and Libor interest rate markets, and misselling of payment protection insurance and interest rate swaps, it will be some time before many people cheer a City recovery.

. . .

The China price

A tiny Maoist sect in London, at the centre of allegations of domestic slavery, believed in the 1970s that communist China was coming to liberate the capital’s Brixton district, which the sect saw as the worst place in the world.

These days, the Chinese are more likely to buy it up than to invade. David Cameron is in China with the UK’s largest trade delegation, touting for investment and exports after 18 months on the naughty step for meeting Tibet’s exiled spiritual leader, the Dalai Lama.

The list of compromises is growing. Mr Cameron is there only after making clear Britain’s opposition to independence for Tibet. On Monday, a journalist from Bloomberg was excluded from a press conference: last year the agency annoyed the Chinese by revealing the wealth allegedly accumulated by relatives of Xi Jinping, the Chinese president. Mr Cameron and Chinese counterpart Li Keqiang each read a lengthy statement and declined to answer questions at the press conference, which ended with applause.

Western countries and companies are all struggling with these issues, but where is the line to be drawn?

. . .

Speed-reading

Unionists responded swiftly last week to the Scottish government’s 667-page policy paper on independence. So swiftly that columnist Robert McNeil in the Glasgow-based Herald likened it to Woody Allen’s claim to have mastered the art of speed-reading. “I’ve just finished War and Peace in 20 minutes,” Allen once said. “It’s about Russia.”

Hull’s humour

Backers of Hull’s successful bid to be UK City of Culture 2017 have defended the use of a porn star in their campaign. Hull-born Poppy Morgan, who has made nearly 150 adult films, featured in a brochure alongside acting luminaries such as Sir Tom Courtenay and Maureen Lipman. The Bondholders marketing organisation, which jointly produced it, told the Yorkshire Post: “Poppy Morgan is an acclaimed actress – albeit in the adult film industry.”

Never say Hullensians lack humour. After the east coast city won the title, visiting football fans from Crystal Palace were greeted at Hull with a chant of: “Here for the culture – you’re only here for the culture.”

brian.groom@ft.com

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