Finance jobs in London shrunk in September as employers weighed up the raft of economic pressures and uncertainty around the forthcoming Budget.
City vacancies tumbled 30 per cent to 1,200 by the end of the third quarter, compared with 1,719 in July at the start of the three-month window according to recruiter Morgan McKinley.
Jobs were down six per cent quarter-on-quarter and 11 per cent annually following more jitters around employment costs and broader economic turmoil.
“Selectivity comes against a fragile business backdrop… the commercial case for each new hire is coming under greater scrutiny,” Mark Astbury, director at Morgan McKinley, said.
“The Budget on 28 October could add to that caution.”
He pointed to the increase in employer’s national insurance, which came into effect last year following ousted Chancellor Rachel Reeves’ first Budget, as weighing on business’ cost base.
“Uncertainty over further measures could encourage some employers to delay discretionary hiring until they have greater clarity.”
Budget uncertainty
John Healey is forecast to have his fiscal headroom slashed following the spike in borrowing costs due to the Iran war, adding more uncertainty ahead of the Budget. A central fiscal projection by analysts at EY suggests that the Chancellor’s buffer against a borrowing target has fallen to £11bn.
Healey has committed to the government’s fiscal rules, meaning everyday spending would be funded by tax receipts in a bid to curb the amount of borrowing. This has ramped up speculation of potential tax hikes as the Chanclleor looks to balance the books.
City banks have gone on the defensive following calls for the government to increase sector-specific charges on lenders.
Jamie Dimon, the boss of Wall Street giant JP Morgan, is understood to have warned Healey in a phone call in August that higher taxes can drive jobs elsewhere.
In a letter seen by City AM, the boss of banking industry Body UK Finance David Postings warned the Chancellor of the consequences of targeting the sector.
“Banking reaches every part of the economy and every region of the country, providing credit to households and SMEs, supporting investment, and acting as the UK’s gateway to global markets,” Postings wrote.
He added: “The debate needs to recognise both the significant tax contribution already made and the wider economic importance of sustainable profitability.”