City Diaries

Another retail giant has floundered, with Woolworths announcing heavy sales reductions amid fears a buyer will not be found. Meanwhile, more details of the government's new homeowner mortgage support scheme have been announced by the Treasury.

Our City Diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.

They will be giving us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.

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EMMA

Emma (not her real name) works in a branch of a large UK bank.

Work is very very quiet, it's a bit eerie really. My colleagues that haven't reached their targets are very worried, not just because business is very slow - well non-existent - but some are seriously seeking other employment. Some are even being 'managed' out (people are looking really hard to find fault with their work etc). I think this is because our bank is being merged with another and will probably end up with a duplicate work force (that's what some of my colleagues are saying). I don't think any of our jobs are safe.

Customers are fed up of being badgered for business, we have to be seen floor-walking most of our time to gain business, but it just is not there. Some of my colleagues are disheartened due to the extra demand to make business. We all have to concentrate extra hard to obtain insurance sales which will generate income but customers are just too scared to change or to increase expenditure at this time. Our bosses just seem to be on top of us more than ever, and their bosses on top of them.

Read Emma's previous diary entries

DANIEL

Daniel (not his real name) works for the London branch of an international investment bank.

Since my last diary entry it appears the world has changed altogether. The pre-Budget report was nothing but a sham. Instead of cutting income tax at the lower brackets to help stimulate the economy the Chancellor decided to try and beat the high street retailers and offer Christmas shoppers a 2.5% discount! Only to forget the retailers were already offering 30% at the beginning of December anyway. On top of that the Chancellor decided to 'sweeten the deal' by freezing the cost of the Road Fund License for another year, only to forget that most of us can't afford to drive anymore. This has also been very painful for the car trade. You can visit car dealerships and buy new cars at unbelievable discounts. Whether it is a Ford or a Rolls-Royce a chunky discount awaits you!

To add to this, The Bank of England decided to knock another 1% off interest rates so we are now at a comfortable 2%. While the average person might think this is going to help them, the answer is not at all. Read the terms of your mortgage closely, it may be that this time around the benefit will not be passed on at all. This won't do any good to your savings either. The only consolation is that as we enter the second week of December people are more focused on their Christmas holidays, if they are lucky enough to be able to afford them of course. That being said, the lucky ones had booked and paid for their holidays long before things turned so bad. Or some are just well-earning singles who can still spare the cash. Nevertheless this Christmas period will probably be very different to previous ones and booking next year's Christmas holiday is just a fairy-tale.

Read Daniel's previous diary entries

TOM

Tom (not his real name) works in the investment industry.

The new spending plans announced by Barack Obama have been greeted by many as the new "new deal". A trillion USD is the cost of "change" which naturally comes from the audacity of hope! Massive infrastructure renewal projects and even something for the US car industry have been among the Christmas presents. On hearing the news, the markets saw something of a rally - once again underlining the irrational nature of their behaviour.

I'm not hearing much optimism. The expectation is that, as it is only banks that have been bailed out, many businesses will fail - both those which defied gloom and doom prophecies (such as Woolworths) and a few surprises as well. The falling value of the pound shows just what the markets think of the UK's near-term economic prospects in general. And those who think that the falling pound means that demand for manufactured British goods may rise should also consider that overall output and demand is falling worldwide.

All of this unsurprisingly means that this year's Christmas celebrations have been more muted than any that I can remember. Last year, people held massive parties, the credit crunch was seen as something that would blow over quickly once banks got their houses in order. With the onset of recession, however, there is a really depressing feeling among people I know. In addition, people feel guilty about excessive partying when their friends have been made redundant. To borrow a famous American saying, it never fails to amaze me how much it really is all about the economy, stupid!

Read Tom's previous diary entries

Do you work in financial services? Have you had similar experiences? What is the mood like where you work? Send us your comments using the form below.