Scotland's financial sector job market is stagnating

There have been a number of relatively large hiring announcements in Scotland's financial sector recently, so you'd be forgiven for thinking it was back in growth mode again. However, the reality is that employment is likely to be stagnant going into 2012.

The latest Ernst & Young Scottish Item Club report doesn't paint a particularly positive picture for employment within financial services. It says that "virtually no growth is expected" (i.e. less than 1%) within financial services throughout this year and into 2012.

This might seem a little odd. As we've alluded to previously, most banks in Scotland are recruiting again, fund managers are hiring and recent announcements by the likes of BNY Mellon, State Street and BlackRock point to a buoyant job market in investment operations.

Still, according to Dougie Adams, senior economic adviser to the E&Y Scottish Item Club, the net increase in financial sector jobs will be negligible.

"Despite all the hiring announcements, you're still simply looking at a lot of churn in Scotland's financial sector," he says. "For all the positives, there's still some more redundancies likely within the two big Scottish banks, which are likely to match any recruitment activity elsewhere."

Around 1,500 people have been made redundant at RBS in Scotland since it began downsizing, and redundancy announcements north of the border have been relatively scarce since September when hundreds were targeted for cuts.

While Lloyds Banking Group has also been announcing redundancies less frequently, talk of 15,000 job cuts to start at the end of this month could rock the sector again.