By Simon Bowers, the Guardian

Rival hubs such as New York and Hong Kong will push beleaguered City into third place by 2015, CEBR forecasts

City of London: how long does the Square Mile have left as the global financial industry’s top dog? Photograph: Yui Mok/Press Association

London can expect to lose its crown as the leading global centre for high finance this year amid a barrage of City job cuts, falling bonuses and competition from rival hubs led by New York, Hong Kong and Singapore, according to a study.

By 2015 the explosion in jobs in Hong Kong will have pushed the Square Mile into third place on a league table of international financial centres, says the Centre for Economics and Business Research (CEBR).

The CEBR also had more immediate bad news for London’s bankers, suggesting combined City bonus pools are likely to slip to £4.4bn this year, down from £6.75bn for 2011 and £11.56bn in 2008.

Such will be the rise in finance job numbers in the far east that London is expected to only narrowly employ more financial workers than Singapore, the region’s number two financial centre, in three years’ time, the CEBR predicts.

Its chief executive Douglas McWilliams painted a dire picture of the consequences for the wider UK economy, insisting that “the biggest loser from this is the taxman”. He said: “Taking into account the loss of income from a much smaller City, from lower corporation tax, stamp duty and other city based taxes, I estimate that government revenues from the City in the current financial year are likely to be about £40bn compared with the £70bn which it received in 2007/08 at the peak of the cycle.”

The government faces a difficult balancing act as it seeks to defend London’s place as a leading financial centre, and major tax revenue contributor, while at the same time navigating a passage to a more balanced economy.

In March George Osborne vowed in his budget speech that a raft of transformative pro-business tax breaks would create a country that would be “carried aloft by the march of the makers”. Under the logic of that transformation, Britain’s current account will gain credit because it will manufacture more things that are consumed abroad, rather than relying on expenditure by indebted UK households for economic growth.

But such a manufacturing driven change has proved more difficult to conjure in the face of sustained, subdued global growth – particularly for Britain’s main export partners the US and Europe.

The latest predictions from the CEBR follow its forecasts last week that City job numbers will fall to 237,036 next year, their lowest level since 1993.

The number of people employed in the financial sector in London, excluding most accountants and lawyers, has sunk below 250,000 this year, 11% down from last year. At its peak the City employed more than 350,000 people before the financial crisis struck.

For more on this story go to: http://www.guardian.co.uk/business/2012/nov/11/london-lose-title-finance-capital