Surge in London hiring intentions could be bellwether for UK

A surge in London employers’ permanent hiring intentions could be encouraging news for the UK economy, according to industry data from the Recruitment and Employment Confederation.

The REC’s latest Jobs Outlook shows London employers’ intention to hire permanent staff outpacing the overall UK level that itself is also positive.

The body’s net outlook, taken from a survey carried out in June 2024, looks at the percentage of employers intending to increase permanent hires and subtracts the percentage intending to decrease.

London employers’ plans to increase permanent headcount in the short term (the next three months) are much more optimistic than the rest of the UK – a net outlook of 33.2 for London versus 18.4 for the UK. In the medium term (the next four to 12 months), the net outlook for London was 35.3 for London versus 15.3 for the overall UK.

The REC says the figures for the capital are an encouraging sign of what is to come in recruitment across the UK, which can contribute to improved productivity and economic growth.

Kate Shoesmith, REC deputy chief executive, said: “The surge in London employers’ intention to hire is hugely promising because the capital is both a bellwether for the UK economy as a whole and an important signal to international investors.

“There have been signs of a turn in the labour market in recent months, and so now we need this positivity to extend to businesses across the UK. Such a snowball effect is especially helpful for graduates and school leavers who are looking to take their first steps on the career ladder this summer, and those trying to get back into the labour market after time off work.”

London employers are also far more inclined to “increase greatly” their headcount of permanent employees: 29.3% for London versus 6.9% for the UK in the short term; and 29.3% versus 4.7% in the medium term.

Shoesmith added: “The new government must seize on this air of optimism with labour market reforms that help rather than hinder employers’ ability to attract and retain workers. Business voices are ready to play our part in explaining the current labour market conditions and how to unlock future growth.

“We urge government to work with us as they develop plans for a new Employment Rights Bill and on the proposed industrial strategy, so it is underway sooner rather than later.”

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