The financial services industry is likely to shed more jobs this year as firms try to reduce costs, according to the CBI's quarterly survey of the sector.

Banks, building societies, insurers and stockbrokers showed a disappointing end to 2002, with business vol- umes falling in the fourth quarter.

Of the 103 companies surveyed, 21 per cent said the volume of business was up during the three months, while 31per cent said it was down.

That gives a balance of minus ten per cent on the CBI's scale - calculated by subtracting those reporting falls from those reporting rises - and compares with zero in the first and third quarters and plus 43 per cent in the second.

John Hitchins, the UK's banking leader at accountancy firm PricewaterhouseCoopers, said: "The industry ended 2002 in a worried frame of mind, reflecting growing concerns about a slowdown in personal sector business and specific fears on the state of the housing market."