British businesses shed staff at the sharpest rate in more than three years in the run-up to Rachel Reeves’s second budget, as months of swirling tax speculation paralysed hiring decisions and pushed employers into contraction mode.
New figures from the Bank of England show private-sector employment fell by 1.8% in November – the steepest monthly drop since July 2021. Finance directors told the Bank they also expect to reduce their workforces by an average of 0.7% over the next year, marking the biggest planned decline since October 2020.
The data shines a stark light on the chilling effect that Westminster’s pre-budget uncertainty has had on the UK labour market. 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 evidence of “collapsing job growth driven by chaotic pre-budget tax hike speculation”.
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