Most economic statistics tend to be retrospective, measuring activity over the past month or quarter – so will not take into account what is happening in the Middle East. Which makes news on the UK economy even more concerning – the ONS reported that January saw exactly zero growth, against a prediction of 0.2%. In the quarter ending January, the economy expanded by 0.2%.
REC/KPMG reported a slightly more positive outlook for the UK labour market. Its index of permanent hiring rose to 49.2 – still contracting, but a much higher reading than the previous month’s 46.9. Vacancies, however, have still now fallen in each of the past 28 months.
There was contrasting news this week from two of the major quoted recruitment firms – Korn Ferry reported a 7.3% increase in fee revenue for its third quarter, with executive search up 13.4%. Not so bullish were Robert Walters, who confirmed a disappointing 2025, with revenue down 12%, largely driven by fewer permanent placements and lower hiring across recruitment outsourcing.
Some fascinating data from Kone, the elevator business, which reported that London workers were returning to the office at a quicker rate than their European colleagues. London lifts were 11% busier in January 2026, compared to 12 months earlier. The nearest comparator was Paris with an 8% increase.
The war in Iran is likely to influence trade, oil prices, economic growth and, as a result, organisations’ hiring enthusiasm, and not in a positive way. Whilst the REC/KPMG figures hint at a quietly improving labour market, subsequent months are likely to be impacted by the fallout from what is unfolding across the Middle East.
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