Members of the public were seen shopping for Black Friday deals in Glasgow, Scotland.
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LONDON – British businesses lost ground and pulled back on hiring last month, as industry reacted to a bumper offer by the Labor government. Tax increase budgetNew data showed on Monday.
Business confidence in the UK fell in November to its lowest level since January 2023, a new Data BDO, a business consulting and accounting firm, demonstrated.
The BDO Optimism Index fell by 5.81 points month-on-month to 93.49, the largest month-on-month decline since August 2021.
BDO said the decline – which was recorded in both the services and manufacturing sectors – “is likely to reflect businesses' immediate reaction to the announcements in the Autumn Budget”.
It was presented by British Finance Minister Rachel Reeves on October 30 Fall budgetWhich included a series of tax increases. The most important of these were an increase in the National Insurance (NI) payroll tax paid by employers and a small increase in the National Living Wage.
Companies She responded terrified At the time, they warned that the measures – intended to boost growth – would instead lead to higher inflation and slow hiring.
In its report, BDO cited rising costs, falling orders and continuing labor market challenges as the main issues currently facing companies.
She added: “Although businesses are pinning their hopes on the prospect of further interest rate cuts early next year, cost pressures – including higher National Insurance contributions – may offset any positive effects, leaving a mixed outlook for businesses.”
It comes as job vacancies in the UK fell in November at the fastest rate since the start of the pandemic, according to new monthly labor market data from accountancy firm KPMG and the Recruitment and Employment Confederation (REC).
The report, also released on Monday, showed that demand for staff fell at a “sharp and accelerating pace” last month, representing the largest decline in job vacancies since August 2020.
John Holt, group chief executive at KPMG, said: “Companies must consider the possibility of increased staff costs post-Budget, which has resulted in an accelerating slowdown in hiring activity across the board.”
The decline, which was particularly pronounced among permanent workers, comes amid a broader slowdown in the UK labor market, with the economy slowing after a prolonged period of rising interest rates.
Bank of England Governor Andrew Bailey said last month that employers were right to warn of the potential for job cuts as a result of Labour's budget.
In a November report, the British Retail Consortium wrote to Reeves, warning Retailers will be hit with a £2.3 billion ($2.93 billion) bill when the National Insurance increase comes into force next April.
