Grim times ahead for the city

Fast forward,the American elections are over and the world returns to the subject of the recent global financial meltdown.What does the future hold?

We have focused on the repairing of the banking system since the markets stabilized but over at First Post,Edward Luttwak looks to the future

Few of the hedge funds, the private equity funds, derivatives issuers or derivatives insurers that grew so rapidly from the early 1990s can hope to make a healthy recovery. Not by 2010, nor by 2015, for that matter. Many of the firms will simply disappear.

And this is an iomportant point especially in Britain where much of our economic growth aside from boominmg house prices has come from the financial services sector.

And Luttack sends out a warning

Of the major cities, London, disproportionately dominated by its financial centre, will suffer the most. All the related service industries - such as law firms, expensive restaurants and British Airways, which is so dependent on business and first-class financial traffic - will suffer. As revenues drop, so too will the demand for commercial real estate - expect empty offices across the city. The top end of the residential market is also falling sharply, as the rich bankers who bought Mayfair mansions in the good times are now flying home