UK employment prospects in Starmer’s Britain

What are the job prospects like? Image by Tim Sandle

The latest London Employment Monitor (produced by Morgan McKinley, a global talent services firm) highlights a continued downturn in job availability within the City’s Financial Services sector across multiple timeframes, reflecting ongoing challenges in the industry.

The survey finds an 18 percent decrease in jobs available quarter-on-quarter (Q4 2024 vs Q3 2024) and a 12 percent decrease in jobs available year-on-year (Q4 2024 vs Q4 2023).

Hence, these figures reveal declines in job openings across multiple timeframes, reflecting ongoing challenges in the industry. How much has the government influenced this in relation to the geopolitical situation?

Mark Astbury, Director, Morgan McKinley tells Digital Journal: “The financial services sector in London suffered a contraction in 2024, with job availability plummeting. Job postings saw an 18 percent drop from Q3 to Q4, a 12 percent year-on-year decline when comparing Q4 2024 to Q4 2023, and a 28 percent annual decrease compared to 2023.”

Astbury adopts a pro-business outlook and one that is critical of current government policy.

He adds: “These stark figures paint a sobering picture of an industry grappling with mounting challenges, including economic volatility, geopolitical uncertainty, strategic overhauls, and the rapid pace of technological disruption.”

Astbury does not place all of the blame at the hands of Starmer, stating: “The hiring slowdown began well before the Chancellor’s Autumn Budget, highlighting global economic fragility. High interest rates aimed at controlling inflation have tightened credit markets, reduced consumer spending and curbed corporate investment. These pressures had already caused a cooling of the jobs market long before fiscal policy changes were introduced.”

Government contribution

However, the centrist government of Starmer does in for criticism. Here Astbury indicates: “The budget’s measures, such as the planned increase in employer National Insurance contributions, will only exacerbate the strain on businesses, forcing many to implement hiring freezes or abandon growth plans altogether. While there were attempts to stimulate growth through targeted tax reliefs for specific sectors, the overall sentiment from businesses has been somewhat negative, leaving the financial services sector in a holding pattern as it cautiously approaches 2025.”

In terms of the effects on the business community, Astbury finds: “Financial institutions have adopted cost-cutting strategies, such as redundancies and streamlining operations, as they navigate a challenging economic environment. While reinvestment has slowed, these measures may help businesses position themselves for recovery.”

Real politics

The state of the world is not helping the pathway to recovery either: “Geopolitical uncertainty and the ongoing impacts of Brexit continue to challenge the industry. The steady migration of companies choosing US exchanges over London has drained vital financial activity, slashing job creation and undercutting one of the city’s historical economic pillars. If the government is serious about reviving growth, an urgent priority must be to restore the London Stock Exchange’s appeal and stem the tide of capital flight.”

Astbury concludes “London’s financial services industry faces no shortage of challenges, but its resilience has been proven time and again. Technology and automation are transforming the industry, forcing workers and businesses to adapt or risk being left behind. While these changes offer opportunities in areas like fintech and sustainable finance, they also present significant hurdles for a workforce still navigating economic uncertainty. By embracing innovation and tackling systemic issues head-on, the sector can reclaim its place as a global leader. Collaboration and bold strategies will be essential to driving this transformation.”