London finance jobs market hits the brakes as vacancies fall 30%
Morgan McKinley’s 2026 London Employment Monitor finds vacancies fell from 1,719 in July to just 1,200 in September, as employers become increasingly selective over new hires.
- 6% decrease in jobs available quarter-on-quarter (Q3 2026 vs Q2 2026)
- 11% decrease in jobs available year-on-year (Q3 2026 vs Q3 2025)
- 30% decrease in jobs available between July and September 2026, with monthly vacancies falling from 1,719 to 1,200
Professional job vacancies in London fell to 4,368 during the third quarter of 2026, down 6% from the previous quarter and 11% year-on-year, according to the latest Morgan McKinley London Employment Monitor.
Mark Astbury, director, Morgan McKinley said: “The third quarter of 2026 shows vacancies fell 6% compared with Q2 and 11% year-on-year, but these quarterly figures mask a much sharper deterioration as Q3 progressed. Monthly vacancies fell from 1,719 professional vacancies in July to 1,449 in August and just 1,200 in September — a 30% decline across the quarter.
“The continued fall through September is particularly notable. August typically sees recruitment activity soften as businesses and candidates take time away from the market, but vacancies failed to rebound as businesses returned after the summer. Instead, September ended with vacancies at their lowest level of the quarter, suggesting the slowdown extends beyond the usual seasonal effect.
This reflects a wider softening in the UK recruitment market. The KPMG/REC Report on Jobs recorded a further decline in vacancy demand in August alongside a marked increase in candidate availability. At the same time, permanent placements increased for the first time in almost four years, suggesting this is not a wholesale hiring freeze. The Bank of England’s latest intelligence supports this picture, with recruitment increasingly focused on specific skills gaps and growth or investment projects. “The message from Q3 is therefore not that London has stopped hiring, but that the threshold for hiring has become higher. Employers are more selective about where they commit headcount, prioritising professionals who can address immediate skills gaps, improve productivity or directly support growth and transformation. There are still pockets of strong professional-sector demand, including IT, tax, employment law, restructuring and engineering consultancy. That points to a more targeted recruitment market rather than a wholesale withdrawal from hiring.
“That selectivity comes against a fragile business backdrop. London Employers are balancing the need to invest and grow against higher employment costs, borrowing costs and uncertainty over the economy, meaning the commercial case for each new hire is coming under greater scrutiny.
“The Budget on 28 October could add to that caution. Businesses are already operating with a higher employment cost base, following the increase in employer National Insurance contributions, and uncertainty over further measures could encourage some employers to delay discretionary hiring until they have greater clarity.
Astbury concluded: “The question is whether September represents a temporary loss of momentum or the beginning of a more sustained period of caution as we enter Q4.”