Credit crunch takes shine off City pay

|PIC1|Average salaries in London's financial sector, though still the envy of most other professionals, are down compared with this time last year due to the turmoil in the credit markets.

Candidates placed in May by Morgan McKinley, which recruits mainly for investment banks, hedge funds and asset managers, started on an average annual salary of about 48,300 pounds, down 5 percent from May 2007 figures, the firm said on Wednesday.

Joslin Rowe, which hires for a broader range of financial companies, also reported a year-on-year drop of almost 4 percent in City salaries in May to around 39,700 pounds.

According to both firms, there are still more job-seekers than jobs in the City - while the opposite was the case in May last year - as banks continue to lay off staff and limit hiring in a drive to cut costs.

"The increase in available talent means employers have a greater pool of choice when filling roles. This is driving wage inflation down when compared with last year," said Robert Thesiger, chief executive of Morgan McKinley's parent company, Imprint.

The number of new job vacancies fell 17 percent last month compared with May 2007, Morgan McKinley said.