The latest employment figures from Morgan McKinley suggest that the number of job openings in the City’s Financial Services rose by 12% in the first quarter of 2025 compared to the previous quarter and fell 11% compared to the corresponding period last year.
Mark Astbury, Director, Morgan McKinley commented: “Financial services hiring in London saw a 12% quarter-on-quarter increase between Q4 2024 and Q1 2025, reflecting the sector’s typical seasonal rebound. The end-of-year slowdown, driven by budget constraints, holidays and strategic planning, traditionally gives way to a more active hiring environment in the first quarter. However, this early momentum was quickly disrupted as Donald Trump’s return to the U.S. presidency brought renewed volatility to global markets. The formal introduction of new trade tariffs under his administration has deepened concerns around protectionism and global economic fragmentation, dampening investor confidence and curbing corporate risk appetite.”

“Despite the quarter’s rebound, the 11% year-on-year decline in job availability points to underlying structural pressures within the industry. Persistent inflation, elevated interest rates and geopolitical tensions are fostering a conservative, risk-averse approach to hiring. At the same time, Europe’s surge in defence spending is opening up long-term investment opportunities in areas like military technology and cybersecurity. Yet, this hasn’t translated into short-term hiring boosts, particularly as firms remain focused on efficiency. Many institutions continue to streamline operations through AI adoption and automation, often reducing headcount in entry-level and support roles that fall outside direct revenue generation.”

“London’s financial ecosystem continues to face headwinds from Brexit and growing competition from emerging financial centres. To maintain its global stature, the UK government must adopt bold, reform-driven policies. Key measures could include relaxing regulatory barriers to M&A activity, revising capital requirements, and simplifying listing rules to encourage IPOs. Furthermore, targeted tax incentives in fintech and green finance could stimulate innovation, while stronger trade partnerships with non-EU markets may help mitigate the long-term impact of US protectionist policies. A proactive approach is essential to reigniting confidence and reinvigorating investment in the City.”

Astbury concluded: “Looking ahead, hiring will be shaped by macroeconomic conditions, regulatory developments, and tech innovation. Now that tariffs have been enacted, firms with international exposure are reassessing strategy and headcount plans, especially those tied to cross-border finance and trade. Unless broader market stability returns, companies are expected to maintain a cautious stance, prioritising roles that strengthen resilience and operational efficiency. Demand remains strong in regulatory compliance, risk, audit, and data-focused functions—particularly analysts, developers, and engineers supporting AI integration. Meanwhile, regulatory reforms such as MiFID III and the rollout of ARGA are expected to drive hiring for compliance officers, governance specialists, and regulatory consultants. The coming months will be pivotal in determining whether London leads the next phase of financial services growth or cedes ground to increasingly assertive global competitors”