The UK government's decision to raise employer national insurance contributions starting in April has alarmed business leaders. Phil Jenkins, CEO of Centrus, articulated concerns that this increase from 13.8% to 15%, combined with a drop in the secondary threshold from £9,100 to £5,000, could hinder growth and negatively impact business confidence. The measures come amidst already low levels of confidence, compounded by governmental messaging about financial difficulties, with recent surveys indicating the lowest business confidence since the pandemic. Jenkins warns that the economic landscape may further decline, presenting challenges for fulfilling promises of growth in the G7.
The new employer NICs policy, dropping the threshold and increasing the rate, could severely undermine business confidence and hinder economic growth in the UK.
Jenkins emphasized that the regulatory changes have led to a worrying trend in business sentiment, as recent surveys show confidence at its lowest since COVID-19.
The government's messaging about the dire state of public finances has contributed significantly to the perception that the UK economy is stagnating.
This increase in employer NICs and the decrease in the threshold will require businesses to contribute more at lower salary levels, adding financial pressure.
#national-insurance-contributions #economic-growth #business-confidence #uk-politics #chancellor-rachel-reeves
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