Two-thirds of investment banks say the economy could be stronger in 2007 than it was this year, according to a new survey.

The figures, from Morgan McKinley Employment Monitor, show that 64% of investment banks surveyed believe the economy will be stronger in 2007, while 75% of high-volume City employers expect hiring activity to be greater next year.

The flipside, however, is that 79% expect it to be difficult or very difficult to recruit the right staff in the coming year.

Robert Thesiger, chief executive of Morgan McKinley, comments: “The last 12 months have seen the City economy remain buoyant and the majority of financial services institutions are confident this trend will continue well into next year.”