uncertainty surrounding the terms of Brexit threatens to stymie meaningful growth in the market.
London Employment Monitor August 2017 highlights:
August saw the fourth straight month of stagnant City hiring, with a slight 3% month-on-month decrease in jobs available. Though the year-on-year decrease is more significant at 17%, that mirrors the 2016 trend for the spring through autumn stretch. “The job market remains pretty challenging, and the summer months are usually going to exaggerate that somewhat,” said David Leithead, Chief Operations Officer, Morgan McKinley Financial Services UK.
A lull in August lull is often followed by increased hiring in September and October, but the ongoing uncertainty surrounding the terms of Brexit threatens to stymie meaningful growth. “Uncertainty over the likely terms of Brexit makes it hard for employers to act with confidence, and this makes for poor growth prospects at this stage,” continued Leithead.
The conditions of the hiring market has inevitably trickled down to job seekers who are exercising heightened caution, and this, coupled with holiday season, may be a factor in the 25% month-on-month decrease in professionals seeking jobs. “Whether there is a bounce back in September is the acid test of people’s optimism – do they crack on with their job search or bed down early for winter and wait for bonus season,” said Leithead.
Though the headline indicators for 2017 are clearly down on 2016, Morgan McKinley is seeing, comparatively, a much smaller drop in the number of actual hires, which shows that the base level of churn is unchanged and critical replacement hiring and core functional needs, continues. “Despite the sentiment that the City is in the hiring doldrums, actually there is still demand for talent, banks are continuing to fill openings, including hiring EU nationals, and competition can still be very strong,” said Leithead.
For professionals with high-demand special skills, the market remains welcoming both in terms of hiring and salary increases. “We are in a market where quality trumps volume,” concluded Leithead. An example of a more buoyant sector is Fintech, which leads the pack with its offering of niche roles and expected growth. In a coordinated effort to adapt to this critical sector, more than 20 financial institutions, including industry leaders such as Barclays and HSBC have joined an industry drive to ensure that London remains the fintech capital of Europe.
As Tory and Labour party MPs alike jostle to influence the outcome of the international divorce proceedings, intraparty disagreement is apparent on both sides of the political aisle. Tensions are simmering among Tories, raising the specter of a leadership struggle between Prime Minister Theresa May and Foreign Secretary Boris Johnson. Adding to the speculation is Johnson’s release of his own Brexit plan which consists of four “red lines,” including the refusal to make UK access to the single market contingent on either payment or the mirroring of EU regulations.
In addition to focusing on Brexit plans, the City is also paying close attention to a forecasted hike of interest rates by the Bank of England. The hike would be the first of its kind in a decade. BoE Governor Mark Carney sought to allay concerns within the financial services industry about a potential hike: "We're talking about just easing the foot off the accelerator to keep with the speed limit of the economy and so interest rate increases when they come - when and if they come - will be to a limited extent and gradual," he said.