UK businesses cut jobs at fastest pace in four years over summer, Bank of England finds

"UK businesses cut jobs at the fastest pace in four years over the summer, according to a Bank of England survey highlighting the impact from tax rises on employers. The monthly snapshot from a survey of chief financial officers at British businesses of all sizes showed firms reduced employment by an annual rate of 0.5% in the three months to August, the fastest since 2021."

"There was also a marked decline from the previous month in firms' employment intentions for the coming year. Expectations for jobs growth weakened by 0.3 percentage points to 0.2%. Bank chief warns against exaggerating' rise in UK borrowing costs Labour has come under pressure over its economic management as the chancellor, Rachel Reeves, prepares to hold a late November budget, amid speculation that further tax increases could be required to cover a multibillion-pound shortfall in the public finances."

"Business leaders have warned Reeves that her first autumn budget measure to increase employer national insurance contributions (NICs) by 25bn from April this year has forced them to cut jobs and raise prices. Almost half of the 2,130 companies surveyed by the Bank said they were cutting the number of employees as a result of the change. The monthly Decision Maker Panel survey, which is closely monitored by Threadneedle Street's interest rate-setters,"

UK firms reduced employment at an annual rate of 0.5% in the three months to August, the fastest pace since 2021. A Bank of England Decision Maker Panel survey of 2,130 companies found almost half of firms cut employee numbers following an employer national insurance contributions increase of £25bn from April. Expectations for jobs growth weakened by 0.3 percentage points to 0.2%. Sixty-six percent of firms reported lowering profit margins, 34% raised prices, and 20% said they paid lower wages than otherwise. Fewer firms reported price increases, lower employment or lower wages than the Bank had expected before implementation.

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