What the official numbers say about London's finance market right now

There is no shortage of forecasts about London finance hiring at the moment. Most of them are cheerful. The official data is more complicated, and for anyone actually budgeting for headcount this autumn, the complications are the useful part.

Here is what the Office for National Statistics, the Greater London Authority and the City of London Corporation are reporting: no forecasts, no proprietary indices, just the published figures and what they mean if you are trying to hire in the capital before the end of the year.

Vacancies are at a level we have not seen since 2014

UK job vacancies stood at 707,000 in the three months to July 2026, down 6,000 on the previous quarter. Excluding the pandemic period, the last time the figure was that low was late 2014. Vacancy numbers have been broadly flat since January, falling by only 11,000 across the whole of the first half of the year.

That flatness matters. This is not a market in freefall; it is a market that has settled at a genuinely low level and stopped moving. The ONS attributes part of the weakness in its own vacancy survey feedback to smaller firms holding off on recruitment because of higher labour costs and other operating expenses, a reminder that the constraint for many businesses is budget, not appetite.

Financial services took the sharpest hit of any sector

The number that should give pause to anyone assuming London finance is insulated: workforce jobs in financial and insurance activities fell by 78,000 between December 2024 and December 2025, a drop of 6.6%. That was the largest annual decline of any of the twenty industry sectors the ONS tracks.

A fall of that size does not show up evenly. It concentrates in the roles that were easiest to justify removing - transactional processing, duplicated reporting functions, layers of support that had accumulated during the growth years. What it does not tell you is that qualified, commercially capable finance professionals became easy to hire. Broadly, the opposite happened: the pool got larger at the junior and transactional end while staying tight where it matters.

London specifically has weakened more than the national picture

GLA Economics reported payrolled employees in London down 1.1% year-on-year at the end of 2025, with the capital's unemployment rate rising close to its pandemic-era high. Its more recent analysis makes a point that is easy to miss in the headline figures: opportunities to move between jobs in London have weakened sharply since 2024, and unemployment in the capital has become increasingly concentrated in medium- and long-term joblessness rather than short gaps between roles.

One bright spot in the same data: London's economic inactivity rate, at 20.3%, sits below the UK-wide figure of 20.8%. The people are there. They are simply moving less.

Candidates per vacancy have risen sharply

There were 2.6 unemployed people for every vacancy in the three months to January 2026, up from 1.9 a year earlier. In under twelve months, the ratio of available candidates to open roles rose by more than a third.

For employers this reads as good news, and in volume terms it is. Applications per advertised finance role are up across the board. But a deeper pool of applicants is not the same thing as a deeper pool of suitable applicants, and the practical effect for most hiring managers has been more CVs to read for the same shortlist. Screening cost has gone up, not down.

Pay growth has normalised

Annual growth in average earnings across Great Britain was 4.1% including bonuses and 3.5% excluding them, on the latest ONS figures. In real terms, that is a rise of 1.3% including bonuses and 0.7% excluding them - positive, but only just.

The era of double-digit uplifts for a sideways move has passed. Candidate expectations tend to lag the market by a year or more, so the practical task in an offer conversation is to benchmark clearly against today's numbers rather than either overpaying out of habit or lowballing and losing someone good over £2,000.

The sector's underlying strength has not changed

For all the softness in the hiring data, the structural picture is intact. City of London Corporation figures put financial services GVA at £224bn and related professional services at £99bn. The industry supports around 2.5 million jobs across the UK, the majority of them outside London, and contributes close to £110bn in tax revenue.

This is not an industry in retreat. It is an industry that has stopped adding headcount reflexively and started scrutinising every role. That is a different problem, and it needs a different hiring approach.

What this means if you are hiring in London this autumn

Your vacancy is competing internally, not externally. With vacancy numbers at a decade low and cost pressure cited directly in the ONS data, the hardest approval to get is often your own board's or CFO's. Build the business case around what the role prevents - control failures, missed deadlines, key-person risk - not just what it adds.

Budget more time for screening, not less. A higher candidate-to-vacancy ratio means volume, and volume without a tight brief is just slower. The single most effective intervention is agreeing on your must-haves versus nice-to-haves before the role goes live.

Move faster on the good ones. The GLA data on reduced job-to-job movement cuts both ways. Strong candidates are more cautious about moving, which means fewer of them are on the market, and when one appears, they tend to be in multiple processes. A four-stage interview process designed in 2022 will lose you people in 2026.

Price to today's data. Benchmark against the current market rather than what you paid two years ago or what a candidate says they were offered elsewhere.

Sources

ONS Labour Market Overview (August 2026); ONS Vacancies and Jobs in the UK (March 2026); House of Commons Library, UK Labour Market Statistics (August 2026); GLA Economics / London Datastore, London's Economy Today and London Labour Market analysis; City of London Corporation City Statistics factsheets (2026).