Demand for IT contractors in the UK financial services sector may continue as it looks to continue its recruitment drive, according to a new report.

Lloyds Banking Group has recently announced that around 1,000 IT contractor roles will be culled as part of its new cost-saving strategy.

However, research from recruiter Morgan McKinley suggests that as whole, demand for new workers in the financial services sector, which is the biggest user of IT contractors in the country, is set to continue to grow.

Vacancies at banks and insurers have increased by 23 per cent in the last year, although there has been a slight fall in the last month, the report claims.

Morgan McKinley financial services director Andrew Evans said that workers in the sector will continue to benefit from rising confidence from the major firms.

"These expectations are a reflection of improving business performance across the sector; key to continued market recovery," he said.