Hiring in London is rising at its fastest pace since the boom years before the financial crisis, according to a study out today from recruiters Manpower, in the latest sign that the economic recovery is gathering steam.
Staff are being hired at all levels, from senior City executives to apprentices and trainees, as firms invest for growth.
Pay is rising as demand for staff soars in key sectors including finance, IT and engineering – indicating London could be leading the UK out of the recent period of stagnant wages.
Recruitment in the capital has overtaken the UK as a whole for the first time this year, the study found.
And London’s dominance means growth in the capital helps boost the whole UK – official figures this summer show London accounts for more than 22 per cent of gross value added in Britain, a key measure of output.
Manpower’s index for London jumped eight points to nine per cent in the third quarter – the biggest jump since 2007. Meanwhile the UK’s score slowed a touch from eight per cent to six per cent. The index shows the percentage of firms hiring firmly outweighs those firing workers.
“The big accounting firms and some of the investment banks are taking on apprentices, putting them through almost a mini graduate programme,” Manpower’s James Hick told City A.M.
The system is designed to give staff exactly the skills the companies will need through their careers.
The upbeat study comes after a swathe of other studies showing improvements in the financial services jobs market.
Recruiters Morgan McKinley saw an 18 per cent jump in vacancies for finance workers in August, compared with 2013, as the economic recovery continues to surge. Astbury Marsden believes the flurry of flotations this year has been a particularly strong driver of hiring in the City.
And official data out next week is expected to show another big fall in unemployment across the country.
The next stage of the recovery is expected to be wage growth – so far wages have failed to keep pace with prices, squeezing living standards despite the dive in unemployment.
The Bank of England expects wages to start to grow in the coming months, showing the recovery is well and truly cemented before it decides to start increasing interest rates from the current rock-bottom levels.