June 18 (Bloomberg) -- Job openings in London’s financial- services industry rose in May after a decline the previous month as banks and insurers resumed hiring, according to a survey by recruitment firm Morgan McKinley.

The number of job vacancies rose 14 percent last month from April, the London-based company said in a statement today. The number of openings dropped 20 percent in that month. Candidates took about a week less to find work in May, compared with an average 61-day search the previous month.

Signs are mounting that the U.K. economy is recovering from the worst recession since 1979, as unemployment in May rose less than economists forecast, and the Bank of England said the risk of a deeper slump has receded. The U.K.’s benchmark FTSE 100 index has gained 22 percent since its low in March this year.

“At all the major investment banks and financial services companies, there is a need to be prepared for when the market turns,” said Tom Kennedy, co-founder of Cameron Kennedy, a London-based financial recruitment firm. “There is a reasonable opinion out there that the market may turn at the end of the year, and people don’t want to be caught short.”

There were 3,150 new job openings within the financial services industry in May compared with 2,772 in the previous month. The number of new candidates entering that market also rose 18 percent over the same period to 8,320, Morgan McKinley said. The average city salary increased 2 percent to 49,238 pounds, from the same time a year ago.

Financial firms are hiring workers for risk management, regulation and technical accounting, according to Kennedy.

Hiring Restarts

“A number of firms which had put their recruitment plans on hold for the past six to 12 months have started to hire again,” said Andrew Evans, managing director at Morgan McKinley. “We will have to wait and see whether the latest month’s increase in new job volumes will be sustained.”

Britain’s biggest banks, HSBC Holdings Plc, Royal Bank of Scotland Plc, HBOS Plc, and Barclays Plc, have eliminated more than 44,400 jobs since the credit crisis began in 2007, according to data compiled by Bloomberg. Lloyds Banking Group Plc said this month it would cut as many as 1,660 full time positions and shut all 164 of its Cheltenham & Gloucester branches.

Overall, London-based banks and insurers may eliminate as many as 29,000 posts this year, or 9 percent of the total, the Centre for Economics & Business Research Ltd. said April 20.

To contact the reporter for this story: Poppy Trowbridge in London at ptrowbridge@bloomberg.net

Last Updated: June 18, 2009 05:35 EDT