Image: Business Matters
In the last quarter of 2025, the UK economy only grew by 0.1% amid falling business investment and staffing which has meant that consumers have been left under served and in need of drastic change to be able to receive the products and services they need in their daily lives. The economy only grew by just over a percent last year and Chancellor of The Exchequer Rachel Reeves is planning to use a major speech in the next few weeks to insist that she will stick to her growth plan.
Liz McKeown, the director of economic statistics at the ONS, said: “The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter.
“The often-dominant services sector showed no growth, with the main driver instead coming from manufacturing. Construction, meanwhile, registered its worst performance in more than four years.”
Business investment fell by 2.7% in the final quarter, while consumer spending grew by a sluggish 0.2%.
There has been a striking shift in UK business sentiment this year. That’s according to new data from Robert Half who has revealed that UK employers are now more worried about slow internal hiring processes than macroeconomic and geopolitical instability. The latest data has revealed many concerning points among which included, that the top concern for businesses is the ability to hire talent quickly (65%), surpassing traditionally dominant worries such as macroeconomic uncertainty and budget pressures. The findings highlight the extent of ongoing skills shortages across specialist functions, including finance & accounting, IT and technology, administration, marketing, and legal.
There is a vast shortage of talent in many different sectors of the economy which effects the stability of the market place and how happy consumers are left feeling once they have used particular services. This means that there have been several other increasing pressures being put on businesses aside from the speed at which they hire new employees. Retaining top performers, finding qualified applicants, and attracting candidates with niche skills were jointly ranked as the second-highest concern (63%) among business leaders in 2026.
All of these elements combined are helping to fuel interim and project-based hiring. Businesses are pushed towards seeking immediate access to specialist skills and greater protection for business continuity.
Matt Weston, Senior Managing Director UK & Ireland, at Robert Half, comments:
“UK businesses are facing an unexpected challenge as we move further into 2026: the biggest risk to operational continuity is no longer economic volatility; it’s the speed at which companies can hire. In a market characterised by acute talent shortages across finance, technology and legal, skilled professionals often receive multiple offers and move quickly. When internal processes are slow or too complex, employers risk missing out entirely.
“This marks a clear shift in the talent landscape. External pressures will always influence business confidence, but right now, what appears to be limiting competitiveness most is an internal factor – namely, process inefficiency. This is why we’re seeing such strong growth in interim and project-based hiring, as firms seek immediate access to specialist skills without being constrained by lengthy recruitment cycles.
“Streamlining recruitment, empowering faster decision‑making and creating a compelling candidate experience are no longer ‘nice‑to‑haves’ in this environment. They are essential capabilities for safeguarding growth and ensuring that organisations don’t fall behind in the race for talent.”
The most common challenge that businesses report as currently affecting their turnover is economic uncertainty (29%). More businesses are reporting this as a challenge now than a few months ago, although the percentage is lower than in 2022. This can be seen in the charts below.
Other common challenges – each faced by just under a fifth of businesses – are the cost of materials (18%), the cost of labour (18%, which will include the cost of pay), competition (18%), and insufficient domestic demand (17%, in other words, not enough UK buyers for what the business is selling).
There is a greater outlook from larger businesses who say their productivity will increase in the next twelve months. All of this is happening when the rate at which the national living wage is increasing dramatically to enable more and more people to enjoy a decent standard of living.
