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London jobs market slows as finance sector cuts jobs

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The London jobs market is continuing to roll back for the second consecutive quarter, with confidence down to just +1%. This is according to the latest Employment Outlook Survey from ManpowerGroup which has revealed the impact of impending uncertainty around Brexit on the capital’s key sectors.

The Finance and Business Services sector has dipped into negative territory for only the second time in the last decade, with an Outlook of -1%. With an average outlook of just +2% over the past year, the sector has recorded its least optimistic year since the depths of the financial crisis in 2009.

The ManpowerGroup Employment Outlook Survey is based on responses from 2,142 UK employers. It asks whether employers intend to hire additional workers or reduce the size of their workforce in the coming quarter. It is the most comprehensive, forward-looking employment survey of its kind and is used as a key economic statistic by both the Bank of England and the UK government.

Chris Gray, director at ManpowerGroup said, “This is one of the most cautious jobs markets that we’ve seen in the capital since the crash in 2009. With so much uncertainty surrounding the UK’s exit from the EU, employers are holding back on their resource planning until they have more clarification. Much of London’s fortunes can be attributed to the bellwether Finance and Business Services sector, yet this has continued to slump this quarter, with much talk of banks moving operations out of London in preparation for Brexit.

“The end of banks hiring to manage PPI claims and other is also now starting to filter. A massive £30bn has already been paid out requiring enormous amounts of administration and creating tens of thousands of jobs. Now we are getting to the end of this era, banks are seeing a huge boost in profits, Lloyds, Barclays, HSBC and RBS made a combined profit of £23.9bn last year, and the pipeline of compliance and customer service jobs that have boosted the sector over the past few years is drying up.”

Gray added, “This is not to say that it is all doom and gloom, in London we’re seeing a continued demand for drivers to meet the growth in home shopping and delivery. These roles are usually based around the outside of the Capital.  We’re also seeing continued demand for customer service roles in a range of businesses.  And our clients in the leisure and hospitality sectors are also taking on staff.  However, employers are certainly taking a more cautious view – they’re more likely to make a temporary hire than a permanent appointment at the moment.”

The forecast for the rest of the country is equally subdued. Ten out of the UK’s 12 regions reported a fall in confidence since last quarter, causing the national average to slip from +5% to +4%.

Hiring intentions outside of London are increasingly conservative heading into Spring almost across the board, including the East (down nine points to +3%), Wales (down nine points to 0%), the South West (down seven points to +1%) and North East (down five points to 0%). The only regions bucking this trend are the South East, which rebounded from a negative outlook of -2% in Q1 2019 to +5%, and Scotland, which is sluggish but unchanged at +2%.




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