Employer confidence grew in the lead-up to Budget

New data suggests the labour market will remain resilient, despite the ongoing economic challenges expected next year.

In the lead up to the Budget, business confidence about the UK economy did remain weak, however, in terms of their own investment and hiring decisions, employers are getting more confident.

The Recruitment and Employment Confederation’s (REC) latest JobsOutlook showed a building momentum, which included notable strength in the capital.

Commenting on the findings Neil Carberry, REC Chief Executive, said, “The strong growth in employer confidence about hiring and investing in their own firms slowed a little as firms awaited a Budget they knew would be tough.

“The scale of the changes to Employers National Insurance – in particular the decision to increase the tax far more for lower earners – will be a headwind for hiring confidence from here on in. But the economy and the labour market are subject to far greater trends than government action, and the gentle recovery of employer views on the wider economy will be what ultimately drives demand in 2025. London appears to be leading the way on this.

“The big question now is not if firms will restructure their hiring plans post-Budget, but whether wider economic growth will make this an annoyance in a growing wider economy, or a headwind that firms struggle with in a tough economy.

“The Chancellor has balanced the books on the backs of businesses across the country, now she needs to deliver on support for growth. A key part of this will be ensuring further costs are not layered onto employers unnecessarily. Making sure the Employment Rights Bill maintains and enhances our flexible, diverse labour market – rather than loading firms with more costly process that does not help workers – is a key test.

“Confidence trends this year suggest the labour market will remain resilient, despite ongoing economic challenges in 2025. Businesses are adapting, embracing new ways of working and determined to succeed. They can boost their ability to compete in the labour market by engaging with specialist recruitment and talent businesses, who can also help jobseekers with more up-to-date advice and guidance.”

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