Resilient wages and GDP growth offers hope amid financial strains
Key stats from Morgan McKinley’s 2024 London Employment Monitor:
- 18% decrease in jobs available quarter-on-quarter (Q4 2024 vs Q3 2024)
- 12% decrease in jobs available year-on-year (Q4 2024 vs Q4 2023)
- 28% decrease for 2024 from 2023
The latest data from Morgan McKinley’s 2024 London Employment Monitor highlights a continued downturn in job availability within the City’s Financial Services sector. The figures reveal declines in job openings across multiple timeframes, reflecting ongoing challenges in the industry.
Mark Astbury, director, Morgan McKinley commented: “The financial services sector in London suffered a contraction in 2024, with job availability plummeting. Job postings saw an 18% drop from Q3 to Q4, a 12% year-on-year decline when comparing Q4 2024 to Q4 2023, and a 28% annual decrease compared to 2023. 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.”
“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. 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.”
“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. 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.”
“Despite the turbulence, there are glimmers of hope. The Bank of England forecasts that wage growth will remain robust, providing crucial support for household incomes even as inflation stays above the 2% target until at least 2027. Resilient wages could help sustain consumer spending and confidence, cushioning some economic blows. Meanwhile, predictions for 2025 suggest that a modest recovery may be on the horizon, with the OECD anticipating GDP growth of up to 1.7%. With interest rates expected to ease this year, the groundwork for revival is taking shape, offering a much-needed ray of optimism for an embattled sector.”
Astbury concluded “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.”