The white-collar jobs market is expected to remain down for most of next year due to economic and global uncertainties, according to Timo Lehne, CEO of SThree. The main reason for the downturn is uncertainty about the next 12, 18, 24 months, leading to a reluctance to make new hires, especially permanent ones, and workers being hesitant to leave their current jobs due to fear of being “last in and first out”. SThree, which specialises in finding jobs in the technology, engineering, and life sciences industries, has confirmed an adjusted pre-tax profit of around £67m for the financial year to November. However, Lehne believes that SThree’s pre-tax profit in 2025 will be closer to £25m, 62% less than analysts had predicted. The slowdown is particularly severe in Europe, with the UK being the worst performer.

Chancellor Rachel Reeves’s recent Budget adjustments to capital gains tax (CGT) and dividend tax allowances are set to significantly impact the finances of average Britons. According to Myron Jobson, senior personal finance analyst at interactive investor, “the triple whammy of CGT cuts and dividend tax allowances” will lead to increased tax burdens, with some individuals facing an additional £1,261 in tax by 2025. The CGT rate for basic-rate taxpayers has risen from 10% to 18%, while the dividend allowance has been halved from £1,000 to £500. Jobson said the freeze on the personal allowance at £12,570 until April 2028, combined with wage inflation, will exacerbate the tax burden for many.

Recent polling by the European Council on Foreign Relations (ECFR) reveals a significant shift in public sentiment regarding UK-EU relations. A majority of Britons who previously supported Brexit now favour a return to free movement in exchange for access to the single market. The report says: “There is a remarkable consensus on both sides of the Channel that the time is ripe for a reassessment of EU-UK relations.” Among UK voters, 68% support free movement for single market access, with notable backing from various political parties. The report highlights that both UK and EU citizens are open to a more ambitious reset of relations, with 50% of Britons believing that closer ties would bolster the economy and security. The findings suggest that public opinion is ahead of government positions, urging leaders to align with the evolving sentiments of their constituents.

Consumer confidence is recovering from a dip caused by pre-budget anxieties, with the GfK index rising to -17 in December, following a three-point increase in November. Despite concerns over inflation due to rising prices from businesses, the data indicates a growing optimism among consumers regarding their finances and a willingness to spend.

Canopius, one of Lloyd’s largest insurers, is preparing for a potential initial public offering (IPO) on the London Stock Exchange next year. A consortium led by US investor Centerbridge Partners is favouring an IPO over a sale, aiming for a valuation in the low single-digit billion-pound range. Canopius has seen significant growth since its establishment in 2003, with a pre-tax profit of $329m last year, up from $163m in 2022. The company’s insurance contract written premium rose by 23% to $1.84bn in the first half of 2024.

The UK’s economy is expected to be minimally affected by Donald Trump’s proposed blanket tariffs on imports, primarily due to its strong service sector, which constitutes two-thirds of its exports to the US. A Reuters poll indicated that many economists believe the UK could be spared from the 10-20% import charges, as the focus of Trump’s tariffs is on correcting trade deficits with other nations. Stefan Koopman from Rabobank said: “The UK is relatively well positioned to withstand the repercussions of President-elect Donald Trump’s proposed trade tariffs.” In contrast, eurozone countries, heavily reliant on goods exports, may face significant economic challenges.

The European Central Bank (ECB) has reduced its benchmark interest rate from 3.25% to 3% in response to signs of slowing growth and political instability in France, as well as potential new tariffs from the US. It’s the third consecutive cut with traders predicting further easing next year. The eurozone is projected to grow by 0.8% this year, with concerns that high interest rates could hinder economic recovery. Major firms in Germany are announcing job cuts, further impacting economic sentiment.

Ministers are urging banks and investors to maintain support for the UK’s defence sector amid rising ethical concerns and operational challenges. Business Secretary Jonathan Reynolds, alongside Defence Procurement Minister Maria Eagle, will host a meeting to address the impact of environmental, social, and governance (ESG) principles on investment in defence. Reynolds said: “Our world-leading defence sector is vital to the economy, supporting thousands of high-skilled, high-paid jobs across the UK.” Recent data indicates a 9% reduction in UK funds’ investment in defence companies since early 2022, with firms facing barriers in accessing banking services due to ESG issues.

True Potential has borrowed over £1bn to accelerate its growth in the UK’s financial advice sector, reflecting the increasing debt levels among private equity-backed advisory firms.