The research shows that new job vacancies within London's investment banking and financial services industry continued to rise in May 2006 and were up 9.3% on the previous month and up 19.4% compared to May 2005.

Demand continues to be high at all levels across the banking and investment management sectors, particularly for senior qualified accountants, compliance specialists and operations professionals, as business expansion plans at City bnaks fuels a recruitment drive.

Robert Thesiger, chief executive of Morgan McKinley, says: "The figures show very clearly that hiring mandates within financial institutions are extremely strong at present and alongside replacement hiring, business expansion remains firmly on the agenda."

Morgan McKinley says new job numbers once again overtook the number of new candidates looking for a career move last month, and the shortage of staff to fill vacancies continues to be a key issue that banks will need to combat in order to achieve projected growth levels.

Escalating demand for staff is helping to keep the average City salary above £50,000 per annum for the third month running, says Morgan McKinley.

However Thesiger says some curbs are being placed on the growth in permanent salaries as organisations start to look elsewhere for staff - such as the global market or within the temporary market.

He says from Morgan McKinley's own records, the growth in the number of temporary roles coming on to the market has been extremely high in recent months, as banks turn towards experienced temporary workers to meet their hiring needs.