A report by the Centre for Economics and Business Research (CEBR) showed that the decline to an average of 288,000 is forecast to be followed by mainly flat growth in both 2012 and 2013.
The figures, which were revised from earlier predicted rises of 2,000 in 2011 and 3,000 in 2012, were lowered due to the implementation of increasingly tighter regulation in the financial services industry as part of the Independent Commission on Banking report led by Sir John Vickers.
CEBRâs report also cited the ongoing crisis and subsequent lack of confidence in the eurozone as reasons for the fall.
Rob Harbron, economist at CEBR and lead author of the report, said that the figures show how the position of London as a key financial hub is âincreasingly at riskâ.
âWith the possibility of further taxation and higher regulation constraining the relative desirability of London as an important financial centre, the gap between the rising Far Eastern centres such as Hong Kong and Singapore continues to narrow,â he explained.
However, further findings from the report showed that growth is expected to return to the eurozone market place by 2014.
By Jim Ottewill