Edinburgh is most exposed to the consequences of the credit crunch and the slowdown in housing markets among UK cities, after London.

Edinburgh is most exposed to the consequences of the credit crunch and the slowdown in housing markets among UK cities, after London.

Research by the consultancy Oxford Economics found that Edinburgh's reliance on the financial services sector made it much more vulnerable to job losses than other big cities.

And amongst a ranking of local authorities, Edinburgh - with a vulnerability index of 122 - was listed at 14th most exposed.

It was one of only three big cities to feature in the top 40 most vulnerable local authorities.

Topping the city table with an index of 310 was London. Bristol and Newcastle ranked 23 and 32 respectively.

A number of leading cities were judged to be much less vulnerable than Edinburgh. These included Glasgow, which ranked 86th. Leeds and Cardiff ranked 44th and 74th respectively.

However, the study highlights the fact that the reliance of some relatively small centres on one or two financial services firms makes them especially vulnerable.

For example, Calderdale, the authority which is home to the Halifax arm of HBOS, was sixth.

And Chester, which is home to credit card and leasing operations, was third. The borough of Tower Hamlets in east London was second.

Neil Gibson, director of regional services at Oxford Economics, said while centres like the City were undoubtedly vulnerable, many parts of the country were heavily reliant on financial services.

"The collapse in mortgage lending, and a static market for consumer credit, together with widespread cost reductions in many retail banks, means that the impact of the credit crunch could be far more widespread than just London.

"In addition, the knock on effects on business services and construction and the anticipated retail slowdown will affect many areas."