With City jobs under ever-greater scrutiny in the recession, City recruitment firms have told Recruiter of freezes imposed by clients.

Matthew Holden, director of Fortune Selection, a banking, accountancy and law headhunter, has seen clients in the latter two sectors worst hit, and reports three offers of senior management positions put on hold indefinitely in the last week alone. He spoke of his disappointment that over excitement around a strong start to 2011 in the markets has pushed the market back to 2007 levels, adding that it felt like the last three years have been “wasted” as a result.

Christine Looker at global financial services recruiter Citifocus confirms that senior level recruitment in the City has been affected. “We have seen freezes with two of our clients — one selective and one across the board. It’s been fragile all year and any recruitment, particularly at senior level, has been under the microscope more than usual.”

Royal Bank of Scotland looked set for a major recruitment drive into its investment arm, as reported 7 August in The Sunday Telegraph. RBS confirmed this as incorrect to recruiter.co.uk, also admitting the possibility of significant jobs cuts, as reported on recruiter.co.uk on 10 August.

This came the same week that financial services recruiter Astbury Marsden announced that 4,800 new City jobs had been created in July, an 11% fall from the previous month, with 14,280 City staff looking for a new job in that month, a 32% increase from June.The firm additionally warned of significantly harsher than usual cuts to the bottom-performing of investment banks.

Finance, banking and accountancy recruiter Morgan McKinley released figures on 17 August that for the most part correlated closely with this. Although the recruiter put the figures for City jobseekers somewhat lower, jobseekers still outnumber new vacancies nearly two to one.

In contrast to this gloomy picture, Deloitte’s workforce grew by 7% in the year ending 31 May 2011, up from 2.5% in the previous 12 months, with almost half of this year’s jobs going to graduates and school leavers.

Meanwhile, a Santander spokesperson told Recruiter that its projected recruitment of 7,000 this year is marginally up on previous years, with the investment arm “absolutely in growth”.

Stephen Hellier, director of multi-sector recruiter initi8 Recruitment, reports this as being “the busiest August” of his company’s four-year history, while Stephen Pearce, co-founder of KennedyPearce Consulting, financial recruiters to the public and private sectors, feels the City market is strong and has “heard nothing” of freezes.

Top graduates seem to be falling on the side of the optimists. Lizzie Darlington was a recruiter for Barclays Capital before becoming a careers adviser at firstly the University of Cambridge, and now Oxford. She told Recruiter that bad news in the City over the last few years has had no great impact on Oxbridge students interested in a career in the City, or at least “not as much as I would have expected. Even with the Lehman Brothers collapse [in 2008], students who are keen on the City are still willing to try.”

Recruiter also asked Kate Murray of The Careers Group, the careers service of the University of London, if the current climate had hit their students’ City ambitions. “No, not in the slightest” was her response, adding that the service’s annual ‘City course’ in September, offering a week of visits to organisations including Lloyds of London, HSBC and the Financial Services Agency, was well oversubscribed “as usual” when applications closed in June.

Many recruiters who spoke to Recruiter were wary of giving too negative or too upbeat an impression of business, indicating their main hope was avoiding a return to 2007 conditions. One recruiter suggested that the traditionally slow August month is not an ideal moment to take stock, saying proper reviews will be made in September.

Midsummer may be the silly season for some, but City employers, and employees, would do well to take it seriously.