The City will continue to be an attractive destination for financial services talent, according to Richard Hoar, director at financial recruiter Goodman Masson.

Hoar’s comments follow reports in the Daily Telegraph that the Prime Minister has conceded defeat over banker bonuses. The paper quotes a No 10 source as saying: “Whatever the bonuses are, if they are £7bn or £3bn, they will be too big. We are going to get flak and we accept that.”

Hoar told Recruiter: “On the basis of £7bn being paid out, this reflects the profitability of 2010 vs 2009. While the man on the street would say £7bn is an extremely unfair amount, when you look at the City and exclude the outside influences, the numbers being looked at this year is probably in line with expectations.

“I don’t think there is an immediate pressure on talent moving away. There was that period post-credit crunch where you had companies offering to move their workers to Singapore or Switzerland and actually a very small percentage took that up.

“I think we’re back on an even keel. Living in London has a variety of attractions. There is the cosmopolitan nature of the city, the schools and I think we are still in a position where the cost of living in London is worth it.

“I think the coalition government realises that while it is popular for people to make grand demands of banks, that is not a very sensible economic policy. Fortunately the people in charge are taking an economic sensible position on the City of London’s contribution – it needs to make money because it drives tax revenues and we need to pay off the deficit.

“I think the sensible option has won out and the benefits of being in London continues to outweigh any downward pressure on bonuses, which aren’t as bad as some people though they would be.”