cut in the next three months.
According to the BBC, a CBI report has predicted the UK will avoid outright recession but warned jobs are already being lost. It also described the global credit crunch, which began six months ago after banks made huge losses on investments backed by US mortgages, as the worst financial crisis since the Second World War.
But in Guernsey, CGI director Peter Budwin (pictured) remained much more optimistic about the situation. ‘I think their forecast is very pessimistic,’ he said. ‘I suspect the CBI has looked at things like Northern Rock, where there will no doubt be redundancies, but I doubt they will be at that level.’
CBI chief economist Ian McCafferty told the BBC that most companies thought the credit squeeze would get worse in the next six months.
‘Conditions in the financial sector have not improved since the credit crunch began six months ago,’ he said. ‘I think it will go on for quite some time.’
In Guernsey, the Chartered Institute of Personnel and Development claimed there was a shortfall of 1,200 jobs in the financial-services sector alone.
But Mr Budwin said he thought that figure was also overblown.
‘It’s nowhere near that level. Besides, the finance industry is very astute and has adapted its methods to the allocated work market, which is very tight.
‘While companies may have been short of a few people last year, they might only be short of one or two now.’
The potential job cuts in the UK were not an opportunity to solve shortages in Guernsey, he added.
‘We still have to operate within the current system of housing licences and everyone recognises that they won’t open the floodgates. Unless there are some Guernsey-born people who are working in London, I wouldn’t say it could offer much of a solution.’
Mr Budwin also said that while he couldn’t comment on whether the credit crunch was the worst financial crisis since the war, it was certainly unprecedented.
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One Article Comment
I think Peter Budwin is far too optimistic about this.
When there is a major financial disaster, caused by trading in little known instruments which causes hugh losses to the trading Principal, institutions obviously and correctly withdraw from the paricular market involved.
The vast number of traders currently employed in the affected sector and many others will be drasically reduced in order to cut costs, together with their back office support teams.
The figure estimated by the CBI does not seem to be exaggerated.
Once the market steadies later on in the year or early 2009, something new will attract the trading minded managements of eager profit hunting finacial companies and the whole circus will start again. Seven figure bonuses will return….
How many times have we seen it before - albeit not to this degree of danger and seriousness to the whole system.
But this is how markets behave - not for those unprepared to lose money!