The number of new City jobs fell slightly last month despite renewed optimism in the financial services sector, according to a specialist recruiter.

Astbury Marsden said vacancies dropped by nearly 2 per cent to 2,335 compared with September, and by 12 per cent from the same period last year, meaning the City was falling behind the recovery in the wider jobs market.

It said although City hiring had not taken the leap forward many were hoping for, there had been an increase in new contract roles, particularly within asset managers. Operational risk and conduct risk experts were in strong demand.

Mark Cameron, Astbury Marsden’s chief operating officer, said: “Optimism is high and an increase in contract hires is an early indicator of recovery in the City jobs market – but there is a fly in the ointment. The financial performance of the big investment banks is still not robust enough for them to initiate the levels of hiring that you normally associate with new stock market highs.”

Investment banks were the largest employers in the City, it said. While there had been improvements in equity capital markets, with initial public offerings and share turnover improving, debt capital markets and commodity divisions of investment banks were still trading relatively weakly.

Mr Cameron said: “Banks have been badly burnt in the past, hiring on a short term bounce in business volumes and then having to go through costly lay-offs, so many are being prudent and putting off bigger hiring decisions.”

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