As many as 150 jobs in PaineWebber's European operations are under threat as a result of last week's $12bn (€12.6bn) acquisition of the firm by UBS Warburg, according to sources in London. The majority of potential redundancies will come in PaineWebber's fixed income division, which employs around 85 front-office staff, with a similar number of back-office and support staff.

PaineWebber employs nearly 300 staff in three offices in Europe. The vast majority are based in London, where the business is headed by Michael O'Hanlon. A source at UBS Warburg said: 'It is very good at what it does, but we have very strong penetration with European institutions through our local and regional product. I cannot see the need to double up.'