It is always unedifying to say we told you so but, when we wrote a few weeks ago that the slowdown in trading volumes and capital markets activity in the second quarter was likely to trigger thousands of job cuts across the industry, we were wrong. It could be much worse than that.

In the past week, analysts covering the investment banking sector have been queuing up to slash their earnings forecasts across the industry as it becomes increasingly apparent that the second quarter is going to be a stinker. For example, JP Morgan last week cut its forecasts on the sector for the second time in a month, after the second half of June turned out to be even worse than the first half for trading. It now thinks that revenues in fixed income, currencies and commodities - the biggest source of revenues and profits for most investment banks - will be down 24% across the street compared with the first quarter, and revenues from equities will be down by around 14% on the back of lower volumes, asset values and volatility.