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Recruitment & HR

Pre-budget uncertainty and global volatility slow London hiring at year end – Morgan McKinley

There was a 13% drop in jobs available quarter-on-quarter in Q4 2025. 

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Pre-budget uncertainty and global volatility slow London hiring at year end – Morgan McKinley
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Pre-budget uncertainty and global volatility tempered hiring in London at the end of the year, according to Morgan McKinley’s 2025 London Employment Monitor. 

There was a 13% drop in jobs available quarter-on-quarter in Q4 2025. 

However, vacancies were up 16% compared to Q4 2024, and total jobs for 2025 increased by 12% year-on-year.

Mark Astbury, director at Morgan McKinley, said: “Hiring across London’s financial services sector softened in the final quarter of 2025 as organisations responded to economic, political and market pressures. 

“While Q4 is traditionally the most conservative hiring period due to seasonality, this slowdown was amplified by global market volatility, US trade tensions and uncertainty ahead of the November budget.

“Signals around potential tax and levy increases, prompted many businesses to pause or reassess hiring plans. In London’s internationally connected financial ecosystem, discretionary recruitment was deferred, while critical and strategically important replacement roles continued to be filled.”

Astbury added: “Despite the quarterly slowdown, the broader picture remains resilient. 

“Financial services vacancies in Q4 were 16% higher year-on-year, while total sector employment rose 12%. 

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“That resilience could have been stronger had 2024’s budget taken a more business-supportive approach, particularly around the National Insurance increase, which dampened confidence.”

“London continues to attract talent and investment but growth is increasingly selective and skills-driven.”

He said: “Demand is concentrated in roles that support transformation and regulatory delivery. 

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“Technology, operations and change are being priorities to support critical initiatives in 2026 including capital and liquidity management, automation, operational resilience (including AI governance), regulatory remediation and data reporting. These initiatives are driving demand for specialist skills over volume hiring.

“Sector trends underline this shift. Software and computer services now account for over 16% of vacancies, with investment management and banking close behind at 15%.”

He added: “FinTech hiring rose by over 50% year-on-year, while banking, insurance, and accountancy saw strong growth in operations and IT-focused roles. 

“By contrast, insurance claims roles fell 3%, broking dropped 20%, and clerical and administrative positions declined 16%, reflecting the impact of automation, AI adoption and relocation of lower-value functions.”

He said: “With unemployment at 5%, inflation at 3.2% and interest rates at 3.75%, conditions point to a measured rebound in early Q1, which typically sees hiring growth of around 16%. 

“However, a return to broad-based recruitment is unlikely, as London’s financial services market becomes more focused, with growth driven by technology, operations, regulatory initiatives and strategic delivery. 

“The pace and scope of this recovery will ultimately depend on rising global tensions, including ongoing uncertainty around US policy, which continue to weigh on business confidence and hiring decisions.”

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