Job cuts surge as Labour gloom hits confidence and fuels recession fears
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Businesses are cutting jobs at the fastest pace in nearly four years as Labour’s ‘downbeat rhetoric and policies’ take their toll. The closely-watched purchasing managers’ index (PMI) report showed the steepest decline in private sector workforce numbers since January 2021 when Britain was still in the grip of Covid lockdowns.
And it showed business optimism sliding to the lowest level in two years amid concerns about tax hikes announced by Rachel Reeves in the Budget. Chris Williamson, chief business economist at S&P Global Market Intelligence, which compiled the PMI survey, said: ‘The loss of confidence and increased culling of jobs hints at worse to come as we head into the new year.’.
It is the latest sign that the Chancellor’s £25billion Budget raid on employer National Insurance (NI) is stunting growth. The report said some employers decided not to replace departing staff as a result of rising employment costs. Job cuts: Chancellor Rachel Reeves's £25bn Budget raid on employer national insurance is appearing to stunt growth.
Others said the NI changes have prompted them to cut back hours and embark on ‘longer term efforts to restructure workforces’. It also pointed to the imposition of a raft of new workers’ rights regulations as contributing to the ‘marked pull-back in hiring’.
The figures come after a warning last week that the economy was on ‘recession watch’ after official data showed gross domestic product (GDP) declined in October. That was blamed on companies hesitating about their plans as they awaited the Budget, which came at the end of October.
