JobsOutlook: Chancellor must revive employer confidence at tomorrow’s Budget

Employers need a shot of confidence from the Chancellor in tomorrow’s Autumn Budget, according to the latest Recruitment and Employment Confederation (REC) JobsOutlook.

Recent JobsOutlook surveys had shown employers remain strikingly confident in their own businesses, even as their faith in the wider economy faltered. But that confidence in their intention to hire and invest in their own business has started to strain, according to today’s survey of 701 employers. Some of this is because of the speculation about tax rises in the Budget and the inevitability of major changes to workplace law in the Employment Rights Bill. The Budget arriving so late in a tough and complicated year for business is not helping.

Neil Carberry, REC Chief Executive, said:

“Businesses have taken their foot off the gas in November as the hokey-cokey of Budget speculation has grown and grown. With the threat of higher costs going hand in hand with an unamended Employment Rights Bill that will damage workers and employers alike, it is time to back businesses not punish them. Good intentions will not create jobs or investment – action to back firms will. Tomorrow, the Chancellor must restore trust among business in the wider economy after the scare to business from her Halloween Budget last year.

“A Budget for business and greater pragmatism on the Employment Rights Bill will repair some of the damage to business confidence from last year’s Budget.

“The government promised a system to ensure workers working regular fixed hours can have a contract that reflects that. But the guaranteed hours system in the Employment Rights Bill does not do this – it creates a bureaucratic mess and there is little evidence that it is what workers wants. The likely result is higher costs for business and lower job openings for workers. The current approach is lose-lose for business and workers, when government should be going for win-win. If left unamended, it will cost jobs and reduce competitiveness as firms avoid taking a risk on growth because workers will be given a right to a job that the business cannot justify.

“Jeopardising the temporary jobs market is particularly mistaken, given our Report on Jobs data tells us that temporary hiring is growing while permanent hiring remains more stagnant. Temporary jobs lost will not be replaced – and the losers will be workers who need opportunities.”

In today’s JobsOutlook, employers’ confidence in making investment and hiring decisions slipped from net: +7 in August to net: -7 in October and was net neutral across the period. But it remained two points higher than a year ago and stronger than the prolonged downturn seen in late 2024 and early 2025.

And employers’ confidence in the UK economy fell sharply between August and October 2025, down 16 points to net: -36, the lowest level since January- March 2024, and eight points below this time last year.

Chancellor must use tomorrow’s Budget to boost confidence among employers and thereby build momentum in job market.

Employer confidence in permanent hiring fell across the UK, with larger firms and the South remaining the most optimistic while smaller businesses and northern regions lagged behind.

• Short-term permanent hiring sentiment dropped five points to net: +13, with optimism highest in August (net: +22) before softening in September (net: +8) and levelling off in October (net: +9). Confidence was strongest in the South of England (net: +22) and London (net: +16) Larger and mid-sized employers remained far more confident than small firms.
• Medium-term permanent hiring expectations also eased downwards by five points to net: +16, mirroring short-term patterns. Confidence was highest in the South (net: +25) and London (net: +19), with stronger sentiment among larger and mid-sized firms.

Forecast temporary and contract hiring stayed steady, with confidence falling in London and larger firms but rising in the South and among smaller firms.

• In the temporary and contract market, short-term demand in August-October remained broadly stable, dipping slightly in September (net: +4) before recovering to net: +17 in October. Confidence remained higher in the South. Larger firms saw a drop in confidence while smaller firms improved slightly.
• Medium-term temporary hiring sentiment slipped three points from the previous quarter. Confidence fell in London (from net: +28 to +11) but stayed strong in the South. Larger firms remained most optimistic.

Ends

Notes to editors:

JobsOutlook is produced by the REC in partnership with Whitestone Insights. Till October 2024 it was in collaboration with Savanta ComRes, but from November 2024, to improve the sample size and the robustness of the data REC is partnered with Whitestone Insights. 701 UK employers participated via online survey in the JobsOutlook survey, which was conducted between 11 August 2025 and 8 October 2025. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public/private split. Whitestone Insights is a member of the British Polling Council and abides by its rules.

Change in collaborator and the methodology led to minor adjustments in the quarterly data. The adjustments are within the margin of error.