Job losses in U.K. are expected to escalate sharply in the first months of 2009 as the recession deepens and the credit crunch continues, a Confederation of British Industry survey showed Monday.

Income and profitability levels in the UK financial services sector have fallen at record rates.

U.K. banks, insurers and financial companies may slash as much as 15,000 jobs in the first quarter to reduce their costs, the CBI said.

We expect an intensification of job cuts going forward, Ian McCafferty, Chief Economic Adviser at CBI told reporters in London, according to Bloomberg.

On the CBI survey, 86 percent firms thought it would take more than six months before normal market conditions resume. Banks and building societies expect a fall in new loan approvals in the coming three months.

On January 8, the Bank of England cut its interest rates by half a percentage point to 1.5 percent, the lowest rate since the bank was created in 1694.