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How hard will the credit crisis hit the City?

We estimate that two thirds of the financial and business services (FBS) sector – or one fifth of the total economy - will be directly adversely affected by the recent turmoil in financial markets. We think that the slowdown in the FBS sector will take about 1% off GDP growth, as during the 2001/2 slowdown. However, there’s a fair chance that this time the effect could even be bigger.

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