Jobs in the financial services sector are being created at the fastest rate for a quarter of a century while optimism levels are at a record high, according to research by the CBI and PwC.

The CBI/PwC Financial Services Survey shows that employment grew at its fastest pace since 2007 in the three months to December, while expected employment growth for the first quarter of 2014 is the strongest since the survey began. Optimism about the UK economy also rose at the fastest rate since the survey started in 1989 as profitability rose for the fifth consecutive quarter.

The research suggests that financial services jobs increased by 10,000 in the Q4 2013 and predicts a further rise of 15,000 in the Q1 2014. That would take employment in the sector to 1.16m in Q1 2014 (52,000 lower than Q4 2008).

Kevin Burrowes, PwC's UK financial services leader, said: 'The sector is enjoying growing revenues and volumes of business. Profitability is increasing too. The sector's confidence is illustrated by its rising headcount, a striking reversal from one year ago, and fewer respondents are concerned about demand than at any point since the financial crisis.'

The survey identified regulatory compliance as a major driver of recruitment, with 69% of firms expecting to increase their spending in this area over the next year. More respondents than previously (31%) are now concerned about the availability of professional staff.