Business confidence among employers reaches a two-year high, according to the Recruitment and Employment Confederation (REC)
The latest JobsOutlook survey and REC Chief Executive Neil Carberry's report suggest a positive shift in UK employer confidence towards hiring and investment in 2025. After a challenging and volatile period, there are signs of recovery, with confidence in making investment and hiring decisions rising into positive territory for the first time in several quarters.
The report indicates that employers' confidence in the UK economy improved by 15 percentage points compared to the last quarter, now sitting at net -20 for the three months to June 2025. This change is up 12 percentage points on the three months to April 2025.
Hiring intentions have improved significantly, with permanent and temporary hiring forecasts reaching 10-year highs in some measures. The short-term permanent hiring outlook improved by three points, now at net +13, while the balance of short-term temporary hiring intentions surged, now at net: +12%.
Neil Carberry emphasized the importance of the upcoming Budget in striking a balance between supporting business growth and addressing public finances to sustain momentum. He highlighted that despite challenges such as rising policy costs, inflation, and previous tax hikes, businesses are starting to move forward with plans to invest and hire more.
London and large businesses are particularly optimistic about hiring prospects. Optimism in London remained the strongest in any region for both forecast permanent hiring and temporary hiring. There was a surge in confidence among large businesses (those with more than 250 staff) about forecast permanent hiring and temporary hiring.
The report suggests that encouraging breaks in international trade, stable inflation, and a year of political stability are helping to improve employers' confidence. The latest JobsOutlook survey of 703 employers suggests a tentative turnaround is possible this year.
However, the past 12 months have been volatile for employers due to low economic growth, tax increases, high supply chain and energy costs, unexpected tariffs, and uncertainty about staffing due to the upcoming Employment Rights Bill. Despite these challenges, the data indicates a slow but steady recovery in employer confidence and willingness to invest and recruit during the second half of 2025.
[1] REC JobsOutlook report, Q2 2025 [2] REC Chief Executive Neil Carberry's report [3] Various news sources reporting on the UK jobs market and employer confidence.
- In light of the improving employer confidence as indicated by the REC JobsOutlook report, Q2 2025 and the analysis provided by REC Chief Executive Neil Carberry's report, there seems to be an increase in business investments, particularly in the finance sector.
- Neil Carberry's report, along with various news sources reporting on the UK jobs market and employer confidence, suggests that the upcoming Budget plays a crucial role in striking a balance to support the growth of finance and business sectors while addressing public finances, which is necessary to sustain momentum and recovery.
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