With everything going on, why is employer confidence in the future the brightest in over two years

The past 12 months have been volatile for employers, which includes many financial advisers. It has been marked by low economic growth, tax increases and high supply chain and energy costs as well as unexpected tariffs. And, to cap it off, additional uncertainty about staffing due to the upcoming Employment Rights Bill.

But the latest Recruitment and Employment Confederation (REC) / Whitestone Insight JobsOutlook survey of 703 employers suggests a tentative turnaround is possible this year.

Employers’ confidence in the UK economy is 15 percentage points better than last quarter, now sitting at net -20 (when comparing the three months to April 2025 with the three months to June 2025). The figures suggest spring 2025 was just a blip in a steady two-year trend towards positive territory.

The turnaround has filtered into employers’ confidence in making investment and hiring decisions. This metric is up 12 percentage points on the three months to April 2025, from net -9 to net +3 for the three months to June 2025.  

This return to positive territory suggests confidence is rising month by month. That flows through to rising hiring intentions in all forms of labour supply that the survey measures and strong performance in London, often a bellwether for trends in the jobs market.  

Neil Carberry, REC chief executive, said: “Confidence is the key to growth in 2025, so it is good that businesses are beginning to shake off some concerns on investment and hiring that they have carried for almost three years.  

“Despite a spring battering from the national insurance contribution rise, inflation and other policy costs, there is hope that businesses can step up their trading in the second half of the year. Getting investment plans unblocked will turn firms from delayers of recruitment to hopeful hirers.

The focus now turns to the government. The upcoming Budget must strike a better balance between supporting business growth and addressing the public finances, something that was missing last year.

Carberry said: “[Budget 2024’s] round of increased employment costs stalled a budding recovery in employer sentiment. Encouragingly, breakthroughs in international trade, stable inflation and a year of political stability are helping.  

“The recently announced roadmap for the Employment Rights Bill is another positive step in terms of offering some certainty, but genuine, ongoing consultation with business ahead of the Bill’s Royal Assent and plans for the Budget is essential to sustain momentum.”

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