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Finance sector sees seasonal hiring rebound, as outlook clouded by U.S. tariffs

The number of job openings for financial services rose by 12% in the first quarter of 2025, employment figures from Morgan McKinley have revealed.

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The number of job openings for financial services rose by 12% in the first quarter of 2025 and fell 11% compared to last year, employment figures from Morgan McKinley have revealed.

Mark Astbury, director at Morgan McKinley, said: “The end-of-year slowdown, driven by budget constraints, holidays and strategic planning, traditionally gives way to a more active hiring environment in the first quarter.

“However, this early momentum was quickly disrupted as Donald Trump’s return to the U.S. Presidency brought renewed volatility to global markets.

“The formal introduction of new trade tariffs under his administration has deepened concerns around protectionism and global economic fragmentation, dampening investor confidence and curbing corporate risk appetite.”

According to Astbury, although there was a rebound during the quarter, the 11% year-on-year drop in job availability highlighted deeper structural challenges in the industry.

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Persistent inflation, high interest rates, and geopolitical uncertainty are driving a more cautious and risk-averse attitude to hiring.

Meanwhile, Europe’s increased defence spending is creating long-term investment prospects in sectors like military technology and cybersecurity.

However, this has not yet led to short-term gains in hiring, as many firms remained focused on improving efficiency.

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Companies are continuing to streamline their operations through artifical intelligence (AI) and automation, which is often resulting in job cuts, particularly in entry-level and support positions outside of core revenue-generating functions.

Astbury added that London’s financial sector is still grappling with the effects of Brexit and rising competition from new financial hubs.

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To preserve its global leadership, he said the UK Government must introduce bold, reform-focused measures.

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These could include easing regulatory restrictions on mergers and acquisitions, adjusting capital requirements, and simplifying listing regulations to encourage IPO activity.

He also suggested that offering targeted tax incentives in fintech and green finance could spur innovation, while strengthening trade ties with non-EU countries would help offset the longer-term effects of US protectionism.

A proactive strategy, Astbury said, is vital to restoring confidence and driving investment in the City.

Astbury continued: “Looking ahead, hiring will be shaped by macroeconomic conditions, regulatory developments, and tech innovation.

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“Now that tariffs have been enacted, firms with international exposure are reassessing strategy and headcount plans, especially those tied to cross-border finance and trade.

“Unless broader market stability returns, companies are expected to maintain a cautious stance, prioritising roles that strengthen resilience and operational efficiency.

“Demand remains strong in regulatory compliance, risk, audit, and data-focused functions, particularly analysts, developers, and engineers supporting AI integration.

“Meanwhile, regulatory reforms such as MiFID III and the rollout of ARGA are expected to drive hiring for compliance officers, governance specialists, and regulatory consultants.”

He concluded: “The coming months will be pivotal in determining whether London leads the next phase of financial services growth or cedes ground to increasingly assertive global competitors.”

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