Yes, the Main Beneficiary of the Euro Was...the UK

♠ Posted by Emmanuel in , at 12/07/2011 10:57:00 AM
Probably one of the major irritants in always tense "UK in the EU" relations is the former's ability to corner a lot of the market in trading the currency as well as other euro-denominated instruments. Both are quite interdependent; I would say that London is Europe's financial casino. One observation is the historically close correlation between euro and British pound movements. One can also argue, however, that Britain's status as a top euro-trading centre makes its financial services arguably even more sensitive to fluctuations in that currency's fortunes than those of EMU members.

So goes the euro currency, so goes the UK more than countries actually in the Eurozone. Particularly hard-hit is the square mile of the City of London where employment relies so much on this sort of trading activity. There's a reason why they don't mention the likes of Frankfurt or Zurich.
City job vacancies fell by 42 per cent last month compared with a year ago, as hiring collapsed amid the deepening eurozone crisis, says a report by a leading Square Mile recruiter. Morgan McKinley, a financial specialist, also found in a survey that while two-thirds of City workers still expected to receive a bonus in the new year, a third thought it would be lower than last year’s.
The London banker, never quite a hot property in the Noughties, has seen his ranks among the reserve army of labour grow. Estimates place the current number of such jobs as equivalent to those nearly a decade and a half ago. In other words, ever more folks dreaming of financial fame and glory chasing fewer jobs:
The Centre for Economics and Business Research, a consultancy, has said it expects London to have lost 27,000 financial jobs this year, slashing numbers to levels last seen in 1998. That would take the total to 288,000, well below the peak of 354,000 in 2007. It forecast that this year’s total of bonuses would tumble by 38 per cent to £4.2bn.

Morgan McKinley found that job opportunities in the City fell by 29 per cent last month, compared with October to 2,725 – a figure 42 per cent below last year. Astbury Marsden, another City recruiter, put the fall at 16 per cent since October and said there were five qualified candidates chasing each vacancy, the highest ratio since 2008.
The euro giveth, the euro taketh away. It's an increasingly FILTH-y environment out there (Failed In London, Try Hong Kong). Perhaps it's time for would-be London bankers to FILCH their way as an alternative route to success (my own term of Failed In London, CHina-bound). Either way, the European crisis is doing the City of London no favours.

UPDATE: Also see MP Jo Johnson on this topic more or less.