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Home > News > September 2006 > 08 September 2006

FSSC commissions UK financial services forecast

The Financial Services Skills Council (FSSC) has commissioned a new report entitled 'UK financial services: five years forward'.

The report, by Oxford Economic Forecasting (OEF), looks at drivers of change, such as demographics, technology, regulation and skills needs, over the next five years.

It examines major sectors, such as banking and insurance, and then breaks these down in more detail to look at specific areas such as broking and fund management.

Key points from the five-year forecast include:

* Continued robust growth in sector output, although less strong than over the last five years (averaging 3.5% a year)

* Stronger growth in overall financial services employment, averaging about 10,500 new jobs (or 1%) a year, taking the total number of employees in the sector to 1.12 million in 2010

* Employment in banking and other types of lending expected to rise on average by just over 6,000 jobs a year

* Employment in the insurance and pensions industry expected to continue to decline by around 1,000 jobs a year

* Employment growth in other financial services - principally broking and fund management - is expected to continue to be healthy, averaging over 5,000 jobs a year

* The vast majority of the extra jobs in banking will be outside London - most notably in Scotland and Yorkshire and the Humber

* Employment in insurance and pensions expected to decline in seven of the nine English regions and the three devolved administrations

* London will account for more than half of the new jobs created in other financial services as broking and fund management activities linked to the City continue to expand and the hedge fund industry continues to grow.

FSSC chief executive Teresa Sayers said: "Predicting and planning for skills needs is an important part of our role.

"The FSSC has a UK-wide remit, and so we had to ensure that the report offered a meaningful examination of industry differences and trends by nation and region.

"This has resulted in some interesting predictions for employment growth, and resulting implications for skills needs, particularly in Scotland, Yorkshire and the Humber region, and London, which we will be exploring further with our stakeholders."

The OEF report forms part of the FSSC's programme of work known as 'The Skills Bill'. The final outcome of this work will be an industry action plan, known as a Sector Skills Agreement, for each of the four nations.

Due to complete in autumn 2007, the FSSC says the 'The Skills Bill' will set out exactly what skills employers need their people to have and how those skills will be funded and supplied.

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