High levels of City Confidence for 2007

Highlights

64% of surveyed investment banks expect the 2007 City economy to be as strong or stronger than 2006

75% of high volume City employers expect 2007 hiring activity to be greater than 2006

79% expect it to be difficult or very difficult to recruit the right staff in the coming year

A seasonal drop of 16% in new financial services job figures was registered in November compared to October 2006

New candidate figures also followed a seasonal pattern, down 14% from October to November with fewer candidates willing to move ahead of bonus payments.

Continued City growth expected

2006 was a strong year for the City of Londonís financial services sector, especially within the mergers and acquisitions space, and the vast majority of investment banks expect this trend to continue into next year. 64% of investment banks questioned believed the 2007 economy would be as fruitful as 2006 and three quarters (75%) also believed their hiring activity would increase during the coming year. However, the ëwar for talentí is also expected to continue with the majority (79%) expecting it to be difficult or very difficult to find the talent needed to maintain the growth curve.

Robert Thesiger, Chief Executive of Morgan McKinley, comments: ìThe last twelve months have seen the City economy remain buoyant and the majority of financial services institutions are confident this trend will continue well into next year. The challenge will be sourcing the talent required to facilitate growth. The ìwar for talentî has been a constant theme in the City throughout 2006 and this will continue to be the case in 2007. Attraction and retention will remain at the top of the HR agenda with organisations looking outside traditional candidate pools and to the global marketplace in their search to secure the talent they need.

ìDespite some recent murmurs in the market that 2006 will be a hard act to follow, the research and anecdotal evidence suggests that the overriding sentiment in the City is that 2007 will be another strong year.î

Bonus season affects vacancies and candidates

The tail end of the year is traditionally the time when fewer financial services workers are looking to move roles due to the impending bonus season, and this year is no exception. Candidate numbers in November were down 14% from October levels and numbers are not expected to pick up until the first quarter of 2007 when bonuses have been paid. Institutions are fully aware of this trend and as they come to the end of their hiring budgets for the year, their focus is on the upcoming bonus season as well as finalising headcount requirements for the coming year. This resulted in 16% fewer jobs coming on to the market during November 2006 compared to the previous month.

Year on year figures show that both candidate and job figures have continued to increase, up by around a third (28% and 30% respectively), further demonstrating the degree of expansion that has been taking place in Londonís financial services institutions over the last year.

Robert Thesiger, Chief Executive of Morgan McKinley, comments: ìAt this time of year we always witness a drop in new candidate and job numbers as institutions and candidates alike are preparing for next year and awaiting the arrival of the annual bonus season. This year is no exception. What is significant is that City hiring during 2006 was considerably greater than in 2005 as investment banks expanded their headcount across all sectors and at all levels. The figures reinforce the continued importance of the City of London as a leading global financial services centre and this momentum is expected to continue well into 2007.î