Steady reductions in workforce instigated by Reeves' £25bn NI tax take: Businesses reduce staff for eleven consecutive months
In a challenging economic climate, Britain's private sector employers have been grappling with job cuts for 11 consecutive months, according to recent reports. The move to raise the cost of hiring staff by increasing the rate of employer National Insurance from 13.8% to 15% and reducing the salary threshold for paying it from £9,100 to £5,000 has been particularly damaging to sectors such as retail and hospitality.
The latest employment figures indicate a further decrease in jobs, marking a notable pace. Neil Bellamy, consumer insights director at GfK, noted an improvement in sentiment on personal finances but expressed concerns about inflation and rising unemployment.
The rise in prices charged by private sector firms this month has driven inflation to an 18-month high. Neil Carberry, chief executive of the British Retail Consortium, expressed concerns about the potential for further costs, the impact of the Employment Rights Bill, and new tax rules. He also mentioned the impact of spring tax rises, particularly concerning for employers.
The 'summer slowdown' has hit new job postings, which fell 9.2% last month compared to June. The number of new job postings also decreased in July, according to a business survey by S&P Global. Payroll numbers continue to be cut at an aggressive rate by historical standards, the report adds.
However, there is a contrast between accelerating growth in the services sector and contraction for manufacturers. The findings showed that the services sector is showing signs of resilience, while the manufacturing industry is facing challenges.
The rise in unemployment since the general election has been largely blamed on a £25billion employer national insurance raid. The high number of private sector job cuts since the recent general elections is primarily attributed to Deutsche Bahn's decision to reduce around 30,000 full-time positions over the next five years due to financial losses, as announced by the company's finance chief Levin Holle.
Despite these challenges, a monthly consumer confidence reading published by GfK has ticked higher following this month's Bank of England interest rate cut. Neil Bellamy also mentioned speculation about what the autumn Budget will bring in terms of tax rises.
In light of these economic struggles, Neil Carberry urged ministers to deliver stability and backing for businesses to promote growth. He emphasised the need for a supportive business environment to help the economy recover and create jobs.
It is a challenging time for businesses in the UK, but there is hope that the upcoming Budget will bring measures to support economic recovery and job creation.
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