Source link : https://londonnews24.com/2025/01/13/news/londons-hiring-freeze-are-rachel-reeves-policies-to-blame-for-big-firms-crisis/
Decline in Job Openings in London’s Financial Sector: A Deepening Crisis
The number of job vacancies within the City of London has reached an all-time low since 2020, with analysts attributing this downturn to a decline in employer confidence allegedly sparked by Rachel Reeves’s economic policies.
Latest Research Highlights Employment Challenges
A report from recruitment firm Morgan McKinley indicates that job opportunities in financial services during the last quarter of 2024 were the fewest since the UK faced its lockdown due to COVID-19. This significant drop mirrors concerns about current economic stability.
In tandem, a Deloitte survey revealed a sharp decline in employer optimism, marking the lowest levels seen in nearly two years and aligning hiring intentions with post-pandemic figures. These findings suggest that many organizations are reevaluating their workforce needs under increasing financial strains.
Political Climate and Its Impact on Business Confidence
The downward trend has drawn criticism towards the Chancellor’s office, as both surveys point fingers at Reeves’s fiscal strategies which reportedly intensify employment costs—prompting firms to hesitate on recruiting new employees. Shadow business secretary Andrew Griffiths condemned this situation as a “crisis originating from Downing Street.”
This escalating lack of confidence comes just as stakeholders express concern over rising government borrowing costs following Reeves’s recent budget, which introduced substantial tax hikes for employers.
A Call for Accountability From Labour
Griffiths emphasized: “Repeated findings indicate that Labour’s budgetary decisions have eroded business confidence and hampered our economy.” He added that “the Chancellor has placed Britain at greater risk due to her policy choices,” stressing an urgent need for Labour to clarify how they plan to rectify this situation affecting families nationwide.
The Impact of Budgetary Measures on Employment Costs
The Chancellor’s budget included plans raising operational costs associated with employment through increased national living wage levels alongside higher National Insurance contributions—an approach perceived by experts as exacerbating ongoing concerns regarding employer confidence.
Deloitte Survey Insights:
– Conducted among over 60 financial executives showing extreme pessimism similar to sentiments observed during Liz Truss’s tenure. Companies are now compromising either by trimming budgets or elevating prices amid these challenges.
– Ian Stewart, Chief Economist at Deloitte noted: “Post-budget focus is squarely on cost containment leading CFOs to lower their projections for capital investment while also curtailing discretionary expenditure and hiring.”
A Rise in Job Cuts Amid Financial Uncertainty
Morgan McKinley’s data highlights not only a decrease but also frames it within pre-existing trends prior to Reeves’ October budget; however, they assert that her taxation approaches have intensified these declines significantly. Mark Astbury from Morgan McKinley remarked: “The contraction facing London’s financial sector throughout 2024 reveals deeply ingrained issues includingeconomic instability alongside burgeoning geopolitical tensions and swift technological advancements.”
Looking Ahead: Urgency for Strategic Change
This exhaustive analysis unveils sobering realities confronting an industry struggling against various pressures; consequently necessitating immediate reflection on suitable measures needed going forward. The measures introduced such as elevated National Insurance obligations could worsen conditions compelling organizations into hiring freezes or total cessation of expansion strategies altogether.
The Treasury has been approached for statements regarding these developments but remains silent so far amidst growing concerns surrounding employee welfare across sectors heavily reliant upon robust market performance.
The post London’s Hiring Freeze: Are Rachel Reeves’ Policies to Blame for Big Firms’ Crisis first appeared on London.
Author : london
Publish date : 2025-01-13 18:38:20
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