JobsOutlook: Employer confidence rises but remains fragile ahead of Budget, says REC

In a pre-Budget boost for the new Chancellor, employers report feeling more positive about hiring, investment and the broader economic outlook, according to the latest Recruitment and Employment Confederation (REC) JobsOutlook.

Employers’ perceptions of how the UK economy was performing improved by eight percentage points this quarter (June-August 2026) to sit at -39%, compared with last quarter (April-June 2026).

Similarly, confidence in hiring and investment improved by six percentage points to net: -8% this quarter (June-August 2026) when compared to the previous quarter (April–June 2026).

Despite the improvement, confidence is not roaring back. Both measures remain in negative territory, suggesting employers are still cautious ahead of the Budget and need reassurance from a package that delivers for business and reduces the cost of employment.

Maxine Bligh, REC Interim Chief Executive, said:

“Businesses are feeling better than they were three months ago, but let’s not mistake improvement for recovery. Sentiment on both scores remains in net negative territory, which shows confidence is improving but not yet at the levels needed to deliver the growth businesses and the Chancellor want.

“A strong labour market is fundamental to delivering sustainable growth and the Chancellor has the chance to create better conditions for growth in his first Budget. Businesses have said loudly and consistently that employers need action to reduce non-wage costs. A phased restoration of the National Insurance threshold would make a real difference to employers. We also need greater investment in childcare, healthcare and transport infrastructure, alongside greater reform of the Growth and Skills Levy to support shorter, targeted training programmes.

“Employers want to see pragmatism where it counts, such as easing the impact of the government’s guaranteed hours gamble, by exempting recruitment agencies from the proposals. Reducing the ability of firms to use temporary agency workers kills off a crucial route into work for thousands of young people not in education, employment or training. We hope to see more engagement with business to review proposals ahead of the government’s final response to the consultation. That is the approach that will help deliver results for job seekers and tax returns for the government to invest in public services.”

• The short-term permanent hiring outlook among employers is little changed, standing at net: +8%, which is one percentage point lower than the last quarter (April-June 2026). Sentiment in the North of England was above this average, at +11%, as was the Midlands at +10%.
• The balance of medium-term permanent hiring declined by four percentage points to net: +6% between June-August 2026. The Midlands was the most positive region at net: +12%.
• Medium-size businesses were the most positive about permanent recruitment intentions.
• The short-term temporary hiring outlook among employers for June-August 2026 stood at net: +2%, which is down one percentage point from last quarter (April-June 2026). The most positive sentiment was in the North of England, at net: +6%.
• The balance of medium-term temporary hiring remains unchanged on the previous three quarters, sitting at net: +5%. The Midlands was the most positive for medium-term temporary hiring at net: +11%.
• Medium-size businesses were the most positive about temporary recruitment intentions.

Notes to editors

JobsOutlook is produced by the REC in partnership with Whitestone Insights. 704 UK employers participated via an online survey in the JobsOutlook survey, which was conducted between 15 June and 18 August 2026. 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.