Article updated with extra information 2/6/2008

As the economic "slowdown" takes effect, and the major banks write down billions in losses from the sub-prime mortgage mess, it is perhaps unsurprising that City banks have started to start cutting down on costs.

According to the Register, one major bank has asked its IT contractors to take a 10% rate cut or a quick exit from the company.

The bank in question, Barclays Capital, is not alone according to the article. Other city firms are also cutting back on their contractor outlay - but BarCap has been criticised for its heavy-handed approach.

You can read the article here.

One of our readers has also pointed us to another article which reveals that Merill Lynch has imposed an 11% rate cut on its IT contractor workforce.

According to the article - "Although their US counterparts were apparently advised of the situation last month, London-based recruiters were told just last week - and effectively given 48 hours to sign-up to the change."