"The resulting confusion froze investment and hiring plans. Several business surveys have shown sharp recruitment pullbacks since her first budget in October 2024, when she introduced a £25bn payroll tax as part of £40bn in wider hikes. In contrast, last week's budget focused mainly on raising taxes on consumers, including extending the freeze on income-tax thresholds - a move that will ultimately push one in four workers into the 40% bracket."
"Businesses faced almost six months of rolling briefings hinting at major tax rises, culminating in Reeves's £26bn tax package unveiled last week. Rob Wood, chief UK economist at Pantheon Macroeconomics, described the figures as "collapsing job growth driven by chaotic pre-budget tax hike speculation". HMRC data points to the same trend. Payrolled employment fell by 180,000 in the year to October - the first annual decline outside the pandemic in a decade."
Private-sector employment fell by 1.8% in November, the steepest monthly drop since July 2021. Finance directors expect to reduce workforces by an average of 0.7% over the next year, the largest planned decline since October 2020. Payrolled employment fell by 180,000 in the year to October, the first annual decline outside the pandemic in a decade. Months of pre-budget tax speculation, culminating in Reeves's £26bn package and earlier payroll tax measures, froze investment and hiring. The latest budget froze income-tax thresholds, pushing more workers toward the 40% bracket. Businesses raised pay by 4.6%.
Read at Business Matters
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