Hiring continues, but business confidence starts to weaken

With current economic uncertainty, UK businesses are feeling less confident when it comes to decision-making.

This is having a slightly negative impact on hiring and investment.

Hiring remains in positive territory

Despite this weakening of confidence, the Recruitment and Employment Confederation’s (REC) latest JobsOutlook survey shows that businesses are still planning to hire.

The report found that permanent and temporary hiring across the short and medium-term stayed in positive territory in the February 2026 to April 2026 period – though it eased a little from the previous quarter.

UK businesses are nothing if not resilient

Commenting on the survey, Neil Carberry, REC Chief Executive, said, “Today’s data suggests the strengthening in employers’ confidence on the economy, hiring and investment we saw earlier in the year is easing. But UK businesses are nothing if not resilient.”

Carberry added, “They are retaining sufficient positivity to maintain some momentum in the labour market through the summer. We are also seeing long overdue improvements in hiring sentiment in the public sector, but most pessimism around all short- and medium-term hiring is now coming from small businesses who will be feeling the squeeze of government-imposed cost rises most.

“Resolving the Gulf crisis and delivering targeted domestic support, such as the temporary cut in VAT from 20% to 5%, would give sentiment a kickstart. There is a quick win out there that would not cost the government anything – take the current approach to Guaranteed Hours for workers off the table.

“It is time to put pace on the recovery of the labour market to fire up momentum, and this is a solid approach to boost employer sentiment and get more people into jobs.”

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