Companies cut jobs at fastest pace in four years after Reeves's 25bn payroll tax raid

"The central bank's latest decision-makers panel, which surveys around 2,000 chief financial officers, found that employment fell by 0.5% in the three months to August - the steepest decline since 2021. The survey also revealed that companies plan to cut jobs over the next year at the quickest rate since October 2020, when the UK was emerging from pandemic restrictions."

"HM Revenue & Customs data shows payrolled employment has contracted by more than 160,000 since last October's budget, when Reeves announced a £25bn rise in employer National Insurance contributions. Losses have been concentrated in retail and hospitality, two of the UK's biggest employers. UKHospitality described the scale of job losses as "staggering", while the British Retail Consortium warned that any further tax rises would force businesses into "difficult choices about the future of shops and jobs." More than half of all jobs shed since the budget have been in the low-wage hospitality and retail sectors."

"The British Chambers of Commerce has also cautioned that firms are preparing for a hiring freeze as higher employment costs take their toll. Retailers reported in July that sales growth was "barely touching the sides" of the £7bn in extra costs imposed at the last budget. Business groups have consistently warned Reeves that further tax rises in her 26 November budget would choke off growth and undermine fragile momentum in the labour market."

Bank of England survey of about 2,000 chief financial officers found employment fell 0.5% in the three months to August, the steepest decline since 2021, and firms plan job cuts over the next year at the fastest rate since October 2020. HM Revenue & Customs data shows payrolled employment fell by over 160,000 since last October’s budget, after a £25bn rise in employer National Insurance. Job losses have been concentrated in retail and hospitality, accounting for more than half of cuts. Business groups warned that higher employment costs are prompting hiring freezes and could force difficult choices about shops and jobs.

Read at Business Matters