Vacancies and salaries fall in London as coffee boils and prices rise

February 19th, 2009 by admin | Filed under Daily News, Recession, Retail.

On the day that Lord Mandelson, the business secretary, exchanged words with that pillion of global finance, the American coffee bar chain, Starbucks over the comments made by the chain’s CEO Howard Schultz that the British economy had slid into an unstoppable spiral of decline, statistics were being released showing that to be a city wizard is becoming increasingly financial challenging. Jobs are scarce, pays rises are a thing of the past, getting to work is becoming increasingly more expensive as it is uncomfortable and the coffee tastes like Starbucks.

It will as no surprise to anyone that the number of job vacancies in the City of London has fallen by 64 per cent in the last twelve months, with competition for the few vacancies now available also down by almost half. In other words, the number of people who actually want to work in the city is diminishing at a considerable rate.

And who can blame them, with salaries also falling by six percent from last year, and hiring activity in the City slowing almost to a dead stop as the credit crunch continues to strangle the financial services sector of the UK economy, increasingly more city traders are seeking to earn their daily bread elsewhere. Expectations are that 62,000 city jobs will disappear in 2009, a fall of more than 17 per cent from year.

And that’s not all. The fat pay packets of even a year ago appear to be history, with the average salaries, while still pretty high, is under pressure. With average City salary of around £50,000 meaning a fall of six percent annually to its lowest levels since 2004, it would appear that while that bastion of all that was good in the UK economy has been put on ice for a very long time.

And not only that, those poor souls that still have to learn their living in the financial services industry in Central London, are finding it increasingly expensive as well as uncomfortable to get there! A report issued yesterday by the Confederation of British Industry (CBI) reported that the UK transport network is so unreliable and congested, that it is having a direct effect on business efficiency and competitiveness.

A report said roads were the worst part of the network, rated as poor and getting more unreliable and crowded. In comparison travelling by train travel was rated barely satisfactory, and only in terms of its reliability which was considered to be “improving”, and capacity levels rated as being on the rise.

The report did hasten to point out however that rail fares in Britain are fifty per cent higher than the rest of Europe, whilst the annual season ticket, a favourite of city commuters, almost double the price of the next most expensive country, which is France. In Italy the price of an annual season ticket for commuters travelling the same distances as their UK counterparts is 25% of the price.

Anthony Smith, chief executive of Passenger Focus, who carried out the study, was reported as saying that “British fares were astonishingly expensive, especially for tickets that you buy on the day and especially for commuters in London and the south-east”. “Passenger satisfaction with the rail network had risen but people felt they failed to receive value for money.” He did hasten to point out.

The Department for Transport said it would cost an extra £500m a year to bring UK commuter fares in line with those heavily subsidised European countries. “Since 1997 regulated fares have fallen sharply relative to earnings, raising less than a quarter as much as disposable income,” it said.