Bloody day in the City as 1,300 jobs are axed

12 April 2012

Employees of Citigroup, the world's biggest bank, are now preparing for the axe as sources said it was likely to lay off 1,000 London staff when its first quarter results are published tomorrow.

The cuts are the first confirmation of the scale of the job losses facing the City, estimated this week at 40,000 by JP Morgan – more than one in 10 of all workers.

It will fuel mounting fears of a recession, led by a City downturn. Commentator David Buik of BGC Partners said:

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Struggling: Investment bank UBS will cut 900 jobs from its London headquarters

"The job cuts were inevitable and more banks will follow suit, starting with Citigroup tomorrow.

"Merrill's figures were worse than expected. People are now immune to the numbers because they know there is worse to come."

In another dramatic move, one lender, Rooftop Mortgages, closed down today admitting that the business had become "unsustainable."

Rooftop, which specialised in sub-prime mortgages and some buy-to-let deals, withdrew its entire product range from 5pm.

Ginny Darrow, chief executive, said: "Market conditions have continued to deteriorate and with no signs of recovery in the securitisation and whole loan trading markets, which underpin our strategy, Rooftop's origination business has become unsustainable."

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JP Morgan's London office: The firm predicted 40,000 job losses across the city as the credit crunch takes hold

Chancellor Alistair Darling was today finalising details of a package aimed at averting the threat of a downturn by unblocking the money markets.

The key plank of the plan is an attempt to tackle the freeze in interbank lending by accepting mortgage-backed securities in exchange for government-backed bonds.

The move, if successful, would allow banks to borrow money from each other more easily, opening the way for the deals, on which the City depends, getting back on track

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