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Credit crunch could hit banks' IT budgets

The CBI believes that IT spending will fall in the UK financial sector.

As the credit crunch hits the UK financial sector, IT spending will fall and jobs will be lost, according to the Confederation of British Industry (CBI).

The group said the industry will be forced to shed over 10,000 workers in the country by June and cut back dramatically on IT budgets, as the crunch continues to bite into profits.

"Plans for capital investment in the year ahead are very weak, with plans for spending on IT flat," said a statement from the CBI.

"We can expect further tough times in the financial sector, and as this feeds through into the wider economy it will inevitably be felt through slower economic growth this year and next," said Ian McCafferty, chief economic adviser at the CBI.

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