London brain drain still a distinct possibility

It's unlikely to happen overnight, but with the London financial jobs' market surging ahead and Lloyds Banking Group and (increasingly) RBS now being run from London, Scotland faces an uphill battle in preventing a talent drain down south.

Former RBS chief economist Jeremy Peat warned late last year that Edinburgh risked losing its status as a major hub for financial services as the "centre of gravity" increasingly shifted to London.

Morgan McKinley's latest monthly snapshot of the financial services jobs market reported a whopping 60% increase in opportunities within London during January compared with the same point last year.

While a lot of the evidence for how this is affecting hiring and recruitment on-the-ground remains as yet anecdotal, it does appear that, for the more mobile banking and financial services professional at least, moving to London is becoming an increasingly serious option.

"We are seeing proportionally more people being prepared to make the commitment to go down to London, simply because of the opportunities available there," says Mark Wilson, managing consultant at recruiter Hudson in Edinburgh.

"Depending on what happens with the HQ situation and within financial services within Scotland generally, I can see that happening more and move over the next couple of years," he adds.

But it's not all one-way traffic, stresses Margaret Dyer, managing director of Joslin Rowe in Scotland.

"Yes the London market has picked up, but we are also seeing a trend for Scottish bankers to want to move back to Scotland," she points out.

"We have been seeing more interest from people wanting to relocate back, particularly from the last quarter of last year onwards, and often primarily for quality of life reasons," she adds.

There has been a clear trend for contractors or temporary workers to rethink whether they want to continue flogging down to London, agrees Fraser Campbell, senior consultant at Robert Half in Edinburgh.

"But we have also seen people going to London for more money. Those with fewer commitments, perhaps in their early 20s or 30s will often be quite happy to go down to London," he adds.