London generates more than a third of IT jobs because of the dominance of the financial services sector.

But as offshore wages begin to rise, so does the competitiveness of UK regions, say experts.

The capital is home to 39 per cent of technology posts nationwide, though it represents only 12 per cent of the total population, according to research published this week by ReThink Recruitment.

London and the South East combined generate 62 per cent of all IT jobs, but only account for 26 per cent of the population.

The regional imbalance in demand for IT skills is a consequence of heavy IT use by financial services and central government offices largely concentrated in London, said ReThink Recruitment director Michael Bennett.

‘The financial services industry has ramped up its demand for IT skills over the past 12 months in areas such as investment banking and hedge funds, but these have often been front or middle office roles in London,’ said Bennett.

Growth of back office IT roles, often based in the regions, has suffered because of offshore competition. But as wage inflation abroad begins to bite the UK regions are becoming more competitive.

The North West, South West and East Anglia all picked up a larger share of new IT jobs than last year, says Bennett.