Other articles following the survey

Pay drops for City’s graduate entrants
By David Turner, Education Correspondent

Investment banks and fund managers have bucked the national trend by cutting their starting salaries for newly hired graduates – making law a better bet for salary-hungry students.
The average starting salary of City bankers and fund managers slipped £500 to £35,500 ($70,000) last year as the Square Mile struggled with turbulent financial markets.

Salaries for entrants this year will remain static, according to the Association of Graduate Recruiters’ winter survey, while in law they will rise by almost 3 per cent, pushing the average up to about £36,000.

City law firms, which hire a high proportion of Britain’s law graduates, are heavily dependent on the fortunes of Square Mile clients. But their income – and hence their remuneration – tends to be less volatile.

But in spite of the economic gloom, investment banks and fund managers expect a 28 per cent increase in graduate vacancies this year.

Individual banks have made clear in recent weeks that the City is reluctant to slash entry-level hiring even if the future is more uncertain than usual, because it needs to cherry-pick top talent for the long term.

Across the economy, graduates’ starting salaries are expected to increase by only 2.1 per cent in spite of a predicted 16 per cent rise in vacancies.

The combination of high vacancy numbers and low pay increases suggests that although employers still prefer to hire graduates, the graduate earnings premium is beginning to stall. The premium is the extra amount people can expect to earn if they go to university.

Copyright The Financial Times Limited 2008