Financial sector jobs market on the up … just

Jeremy Peat, director of the David Hume Institute and a former group chief economist at the Royal Bank of Scotland, welcomed the report but warned against getting "carried away".

The annual Joslin Rowe recruitment review of the sector revealed 79 per cent of respondents were "optimistic" or "very optimistic" about trading conditions in 2011.

As a result, 45 per cent of companies said they would be hiring this year, creating 600 jobs, with most new recruits coming in at trainee level. But a significant 23 per cent of firms confirmed there would continue to be job losses, mainly due to restructuring and offshoring, with about 100 jobs set to disappear, mainly at life and pensions firms and investment companies.

The 22 per cent of companies that said they were "very optimistic" about 2011 was a threefold increase on last year. None of those surveyed said they were pessimistic, which compares with 2009 when one fifth of firms in the survey admitted to having a gloomy outlook.

Investment and retail banks with 1,000 employees or more were most likely to be very optimistic, while more life and pensions firms said their outlook was neutral.

The report also found that 85 per cent of firms struggle to recruit skilled staff despite receiving an average of 27 applications per vacancy.

Presenting the report at a meeting in Edinburgh, Peat noted that the survey estimated wages in the sector were set to rise a modest 1 to 2 per cent on average this year, while bonus payouts were reduced in 2010 for directors on 80,000 a year salaries or more as well as those making less than 20,000 a year.

He added slow pay growth would be in line with subdued expectations following the "worst series of data we have seen since the depression".