Morgan McKinley has released its London Employment Monitor looking at city hiring for financial services from January to March 2019. Though the first quarter of 2019 saw an increase in both jobs and job seekers, a deeper dive into the data shows that the city jobs market has shrunk with jobs and job seekers dropping year-on-year to half the figures for 2017. The contraction is a result of years of Brexit related confusion that has left businesses and job seekers unwilling and unable to take risks.
Morgan McKinley’s data corresponds to findings by a number of groups, including IHS Markit’s PMI survey which found that service sector growth “ground almost to a halt in January”, with businesses reticent about taking any risks. BDO’s Business Trends Report found that with a no-deal Brexit being the legal default outcome of the current stalemate, business confidence is “crippled.”
“We closed 2018 with a dramatically poor jobs market, because it’s become virtually impossible for businesses to grow here, so we started 2019 on the back foot,” said Hakan Enver, managing director, Morgan McKinley Financial Services. “We have under half the jobs and under half the job seekers we had at this time in 2017.
“The inability of the government to reach consensus on a Brexit deal has crushed confidence among City employers,” he added. “Even with all the uncertainty of the last few years, there was always an assumption that come 29th March 2019, we would have some answers. Yet here we are, still waiting.”
With the Brexit deadline having been extended till the 31st October Never notes the stress on businesses is showing no sign of letting up. As a result jobs are flowing out of London with Dublin being by far the biggest beneficiary, followed by Luxembourg, Paris, Frankfurt, and Amsterdam. It’s astonishing.
“For the bigger banks, 29th March was the deadline,” says Never, “there are no extensions. They have rolled out their Brexit plans and are deftly deploying staff and other resources to key EU locations. It’s the smaller firms that are now being hit hardest, as they have fewer resources with which to plan and adapt.”
Britain’s technology sector – which intersects closely with the financial services sector – remains the envy of Europe, having earned £2.5 billion in new investments in 2018 according to London & Partners and PitchBook. However, it also saw its lowest rate of growth in three years.
“Financial services and technology jobs were the crown jewels of the UK economy attracting the best and the brightest to the UK yet financial services are struggling to recruit top technology talent in the wake of Brexit. Right now, if you’re ambitious and hard working, studying and working in the UK is looking less and less like the way to get ahead,” said Enver. ”It will take us a decade at a minimum to clean up this mess, which is why we can’t afford another six months of uncertainty. And we can’t afford a hard Brexit. Sadly, the government has played it in such a way that we may now end up with both.”