City Hiring Picks Up, but Confidence Remains Fragile

Key statistics from Morgan McKinley’s 2025 London Employment Monitor:

• 15% increase in jobs available quarter-on-quarter (Q1 2026 vs Q4 2025)
• 5% increase in jobs available year-on-year (Q1 2026 vs Q1 2025)

Job vacancies in London’s Financial Services sector rose 15% in the first quarter of 2026 compared with the previous quarter, according to the latest Morgan McKinley London Employment Monitor. The increase follows a 13% decline in Q4 2025. On a year-on-year basis, vacancies were up 5% compared with the same period in 2025.

Morgan McKinley said the data points to a stabilisation in hiring activity after a weaker end to last year, although market conditions remain cautious.

Mark Astbury, Director, Morgan McKinley said: “London’s Financial Services jobs market showed signs of stability in Q1 2026, even amid ongoing global uncertainty. Vacancies rose 15% quarter-on-quarter, reflecting a return of activity after a weaker end to last year.

While this is partly a seasonal rebound, it demonstrates that hiring is moving in the right direction. Given the disruption at the end of last year, when vacancies fell 13% quarter-on-quarter, the market’s recovery, even if measured, is noteworthy.

The slowdown last year followed uncertainty around November’s Budget which led some firms to delay recruitment and growth plans. Q4 suffered as a result, and Q1 has delivered a cautious return to hiring activity.

This sits alongside a broader global context. The outbreak of war in Iran at the end of February created fresh uncertainty, driving market volatility, inflationary pressures, and a more cautious approach to hiring. Rising energy costs and ongoing disruption have kept firms selective, particularly in sectors sensitive to wider economic conditions. Even so, the 15% quarterly increase shows the market’s capacity to adapt and continue moving forward.

Vacancies in Q1 2026 are 5% higher than the same period last year, a meaningful gain given that Q1 2025 was the strongest quarter before geopolitical tensions and tariff concerns began to weigh on sentiment. The increase suggests demand for talent remains stable and active. However, firms continue to focus on essential hiring and are taking longer to make decisions.

Astbury concluded: “Overall, the market appears to be in a period of stabilisation rather than a clear turning point. Despite ongoing global shocks, the market is progressing steadily. Confidence could return quickly if geopolitical tensions ease, and even with inflationary pressures and the prospect of rising interest rates, the sector has shown notable resilience. London’s Financial Services jobs market is far from at a standstill. The key question for the rest of the year is whether this measured progress will translate into sustained confidence and growth.”

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