Job vacancies in London's financial services sector fell dramatically in the final quarter of 2024, highlighting ongoing challenges in the City's employment market.

Data from Morgan McKinley's London Employment Monitor showed an 18 per cent decrease in available jobs quarter-on-quarter, while year-on-year figures revealed a 12 per cent decline compared to the same period in 2023. The overall picture for 2024 was even more stark, with a 28 per cent decrease in job availability compared to the previous year.

"These stark figures paint a sobering picture of an industry grappling with mounting challenges, including economic volatility, geopolitical uncertainty, strategic overhauls, and the rapid pace of technological disruption," said Mark Astbury, director at Morgan McKinley.

The recruitment specialist noted that while the Chancellor's Autumn Budget has added pressure through measures such as increased employer National Insurance contributions, the downturn in hiring preceded these policy changes. The slowdown instead reflects broader economic challenges, including tightened credit markets and reduced corporate investment due to high interest rates.

A particular concern highlighted in the report is London's diminishing appeal as a financial centre. "The steady migration of companies choosing US exchanges over London has drained vital financial activity, slashing job creation and undercutting one of the city's historical economic pillars," Astbury explained.

Despite these challenges, there are some positive indicators for 2025. The Bank of England forecasts continued robust wage growth, while the OECD projects GDP growth of up to 1.7 per cent. Expected interest rate cuts could also help stimulate recovery in the sector.

Financial institutions have responded to the challenging environment by implementing cost-cutting measures and streamlining operations. However, Astbury suggests that these adaptations, combined with opportunities in areas like fintech and sustainable finance, could position the sector for future growth despite the current headwinds.

"London's financial services industry faces no shortage of challenges, but its resilience has been proven time and again," Astbury concluded, emphasising the importance of innovation and bold strategies in driving the sector's transformation.

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