People shop for Black Friday deals in Glasgow, Scotland.
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LONDON — British businesses lost steam and scaled back hiring last month as industry reacted to the Labor government’s economic boom tax increase budgetnew data showed on Monday.
UK business confidence falls to lowest level since January 2023 in November data Figures from business consulting and accounting firm BDO show.
The BDO Optimism Index fell 5.81 points this month to 93.49, marking the largest quarterly decrease since August 2021.
BDO said declines in both services and manufacturing “may reflect the immediate business reaction to the autumn budget announcement”.
UK Finance Minister Rachel Reeves delivered a highly anticipated speech on October 30 autumn budgetwhich included a series of tax increases. Chief among these are an increase in National Insurance (NI) payroll tax paid by employers and an increase in the National Living Wage.
enterprise react with shock It was warned at the time that measures aimed at boosting growth would instead drive up inflation and slow hiring.
BDO noted in the report that rising costs, falling orders and continued labor market challenges are key issues currently facing businesses.
It added: “While businesses are pinning their hopes on the prospect of further interest rate cuts early next year, cost pressures – including higher national insurance contributions – are likely to offset any positive impact, leaving a complex future outlook for businesses .
Job vacancies in the UK fell at the fastest pace since the start of the pandemic in November, according to the latest monthly job market data from accountants KPMG and the Recruitment and Employment Confederation (REC).
The report, also released on Monday, showed a “sharp acceleration” in demand for workers last month, the largest drop in job vacancies since August 2020.
Jon Holt, chief executive of KPMG Group, said: “Businesses must weigh the prospect of increased staff costs after the budget, which has led to an overall acceleration in recruitment activity.”
The decline, which has been particularly pronounced among long-term workers, comes against the backdrop of a broad slowdown in the UK labor market as the economy is expected to cool after a prolonged period of high interest rates.
Bank of England governor Andrew Bailey said last month that employers were right to warn that Labor’s budget could lead to job cuts.
In a report to Levi’s in November, the British Retail Consortium said: warn Retailers will face a bill of 2.3 billion pounds ($2.93 billion) when national insurance price increases take effect next April.
