Firms axe jobs at fastest pace in 15 years as Budget raid hurts economy: Confidence sinks after £25bn NI hike
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Services firms slashed jobs last month at the fastest pace in more than 15 years outside the pandemic as business confidence slumped in the wake of the Budget. Companies responded to the rising cost of employment, including Labour's £25billion National Insurance (NI) tax raid, by axing staff, according to the closely-watched monthly purchasing managers' index (PMI) survey by S&P Global.
The report added that optimism about growth in the year ahead remained at the lowest level in nearly two years. In a separate report on the situation in the eurozone, S&P said the single currency bloc ended 2024 'in a fragile state' with business activity declining in Germany, France and Italy.
The findings underline the precarious state of the UK and European economies at the start of the New Year. The job cuts in Britain are the latest evidence that the NI hikes are having a damaging impact on the economy, which has stagnated since Labour took office.
Job cuts: Companies have responded to the rising cost of employment by axing staff, according to the closely-watched monthly purchasing managers' index survey by S&P Global. 'A post-Budget slump in business optimism persisted in December,' said Tim Moore, economics director at S&P Global.
'Faced with subdued demand conditions and hikes to employment costs, many service providers opted to curtail their staff hiring and delay backfilling roles in December. 'Excluding the pandemic, this represented the steepest pace of job shedding for more than 15 years.'.
