"A punitive Employment Rights Act and Autumn Budget have seen London's business confidence drop to its lowest level under the Labour government, according to the London Chamber of Commerce and Industry's latest quarterly economic survey of the capital's business leaders. Just a quarter (25%) of London businesses surveyed expect the capital's economy to improve in 2026, with favourable expectations for the UK's economy even lower at 23%."
"Just a quarter (25%) of London's businesses engaged in recruitment activity in Q4, down from over a third (34%) just six months ago in Q2. This more cautious approach to hiring comes amidst tighter regulation from the Government's Employment Rights Act. Guaranteed hours contracts, though well-intentioned, threaten to undermine the flexibility that some firms and workers rely on, and expanded sick pay and unfair dismissal rights making employers less willing to take a chance on new employees for fear of increased costs and potential litigation."
London business confidence has dropped to its lowest level under the Labour government, with only 25% of London businesses expecting improvement in 2026 and just 23% expecting improvement for the UK economy. Falling confidence has been matched by reduced recruitment: only 25% of London firms engaged in recruitment in Q4, down from 34% in Q2. Tighter regulation from the Employment Rights Act, including guaranteed hours contracts, expanded sick pay, and broader unfair dismissal rights, is reducing employer willingness to hire due to higher costs and litigation risk. Fifty-three percent expect to raise prices next quarter, up from 44%.
Read at London Business News | Londonlovesbusiness.com
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