Analysts at JP Morgan are predicting a cull of more than 40,000 City jobs as a result of the sub-prime crisis and global credit crunch.

The figure doubles its estimate in December, and represents about 6% of the capital's estimated 700,000 financial services industry workers.

Redundancies from Britain's lucrative banking-related sectors will have repercussions for the housing market as well as businesses such as restaurants that rely on bankers' spending power said the analysts.

JP Morgan's new estimate came from its property team, rather than its economists, who said in a note: "We expect a potential 40,000 job losses in the City and minus 16% rental growth."

The investment bank recently hired Tony Blair on a reported £2m annual salary. Its forecast comes days after the Centre for Economics and Business Research predicted 19,200 jobs would be lost in the next two years.