The UK's financial services industry is likely to witness a reduction of almost 10,000 jobs during the next three months, reported the BBC, citing a forecast given by the Confederation of British Industry.

The quarterly survey of the sector published by the independent employers’ organization reaffirmed the speculation that the credit crunch is likely to grow in the next six months and may adversely affect the industry.

According to Ian McCafferty, chief economist of the Confederation of British Industry (CBI), the conditions in the finance industry, which covers sectors such as banks, building societies and insurance companies, have been deteriorating since the time the credit crunch surfaced as a problem six months ago.

The financial crisis, which has surfaced in the aftermath of the huge losses made by banks on investments backed by US mortgages, has created a lot of disorder in the global markets.

This is a very serious crisis. Some have suggested it is the worst financial crisis since the Second World War. I think one of the key characteristics is that it will go on for quite some time to come, the BBC quoted Mr McCafferty as saying.

The survey reportedly predicts that the UK is likely to avoid outright recession. However, it does not rule out the possibility of more finance jobs being cut.