In a pre-Budget boost for the new Chancellor, employers report feeling more positive about hiring, investment and the broader economic outlook, according to the latest Recruitment and Employment Confederation (REC) JobsOutlook.
Employers’ perceptions of how the UK economy was performing improved by eight percentage points this quarter (June-August 2026) to sit at -39 per cent, compared with last quarter (April-June 2026).
Similarly, confidence in hiring and investment improved by six percentage points to net: -8 per cent this quarter (June-August 2026) when compared to the previous quarter (April–June 2026).
Despite the improvement, confidence is not roaring back. Both measures remain in negative territory, suggesting employers are still cautious ahead of the Budget and need reassurance from a package that delivers for business and reduces the cost of employment.
“Businesses are feeling better than they were three months ago, but let’s not mistake improvement for recovery,” said Maxine Bligh, REC Interim Chief Executive. “Sentiment on both scores remains in net negative territory, which shows confidence is improving but not yet at the levels needed to deliver the growth businesses and the Chancellor want.
“A strong labour market is fundamental to delivering sustainable growth and the Chancellor has the chance to create better conditions for growth in his first Budget,” Bligh continued. “Businesses have said loudly and consistently that employers need action to reduce non-wage costs. A phased restoration of the National Insurance threshold would make a real difference to employers. We also need greater investment in childcare, healthcare and transport infrastructure, alongside greater reform of the Growth and Skills Levy to support shorter, targeted training programmes.
“Employers want to see pragmatism where it counts, such as easing the impact of the government’s guaranteed hours gamble, by exempting recruitment agencies from the proposals. Reducing the ability of firms to use temporary agency workers kills off a crucial route into work for thousands of young people not in education, employment or training. We hope to see more engagement with business to review proposals ahead of the government’s final response to the consultation,” said Bligh. “That is the approach that will help deliver results for job seekers and tax returns for the government to invest in public services.”
