A wintry mix of Christmas attrition and Brexit blues has made for some record low job numbers in the City of London. A lacklustre 2018 closed with a 52 per cent decrease in jobs available, month-on-month, and a 39 per cent decrease year-on-year. “In 2018 we saw job numbers fall off a cliff,” said Hakan Enver, managing director, Morgan McKinley UK. It is common for December to see significant reductions in the wake of a shorter trading month and Christmas holidays, but not since December 2011 has the year closed with so few jobs available, making Christmas but one culprit for the disappointing downtrend.
The outlook for job-seekers was only mildly less grim, with those seeking new opportunities down by 40 per cent month-on-month and by 29 per cent year-on-year. “We haven’t seen this few applicants to market in December since 2012,” said Enver, who attributes the reduction to the Christmas holidays and the ongoing political uncertainty surrounding Brexit. “We’ve seen January get off to a sluggish start on this front, also. After over two years of navigating the impossible task of preparing for an unknown Brexit scenario, people are fatigued.”
The average salary change for those moving from one organisation to another fell to its second lowest level in 2018, at 15 per cent. “Whilst you could argue, a 15 per cent increase in moving organisations is a modest increase, it is still short of the heights of the 27 per cent we saw back in May of the same year. I suspect this will increase as we press ahead into 2019. With Brexit on the horizon, and candidates less eager to jump ship, fixed pay may creep back up in order for companies to attract and commit talented individuals into their businesses”.
December closes a 2018 plagued by a timid hiring environment in the Square Mile. A surprise summer surge of candidates briefly raised hopes of a turnaround that never materialised. “There was a sense over the summer that the tables might be turning, as candidates demonstrated increased confidence in the jobs market,” said Enver. “But the weight of Brexit proved too much to just shake off, given its immense implications for individual livelihoods and business viability.”
Despite the relatively quiet jobs market, investors continued to pour money into the City, with over 600 City firms raising £37 billion in 2018. “London is still the main place in Europe to transact,” said Enver. “But March of 2019 will define our economy for the next two generations, and there isn’t a person alive who can tell us what that’s going to look like,” said Enver.
Though few expect investments to dry up, investors are being cornered into a bearish stance by the ongoing lack of regulatory clarity. The London Chamber of Commerce and Industry (LCCI) polled 500 companies and found that confidence in the capital’s economy reached a record low in the final few months of 2018. “We’d see even more investment in London if investors weren’t being forced to follow a broken politics process, blow by blow, for two years and counting”, said Enver.
The ever present fear of a disorderly Brexit has many worried that 2019 will be the tipping point for the economy. The Bank of England’s forecast for a worst case scenario Brexit is an eight per cent economic slump. “For two years everyone’s been screaming from the rooftops that we need clarity about the terms of Brexit in order to succeed economically, to no avail. So now it’s time to assume the brace position and hope we survive the impact of what’s coming,” said Enver.