Investment bank Cazenove, the Queen's stockbroker, has become the latest City institution to suffer from the weakening stock markets.

The bank has cut 90 jobs from its London office, representing 8% of its staff.

The move comes after a raft of redundancies in the Square Mile as the downturn shows no sign of abating.

Earlier this week, investment banks Lehman Brothers and Societe General also announced they were axing employees amid volatile investing conditions and a bleak outlook.

City gloom

Cazenove, founded in 1823, had until now managed to resist cutting staff despite the slump in stock markets and slowing business activity.

However, in September it revealed that it profits had fallen by a third, due in part to a lack of activity in its key mergers and acquisitions division.

Chairman David Mayhew described conditions as "the worst downturn in investment banking for many years".

The sentiment has been echoed by banking groups across the world with little sign that the culls are nearing an end.

Join the queue

The Centre for Economics and Business Research (CEBR), a London-based consultancy, has predicted that by the end of 2003, the City will have shed 30,000 jobs since the peak of 2000.

This is an extra 9,000 job cuts since its prediction of 21,000 in June.

The knock-on effect of this has hit the economy hard.

Latest housing market information, for example, has shown the biggest fall in prices in the traditional "stock broker" belts of south London and Surrey and luxury product groups such as Burberry have admitted tough conditions.

Traders said on Friday that the Cazenove job cuts had compounded fears that more bad news was ahead.

"Cazenove binning 90 jobs and Lehman binning 500 jobs tends to suggest that 2003 doesn't look all that great," said David Buik at Cantor Index.