Rachel Reeves has been accused of hammering jobs after new figures showed Britain has suffered the biggest hiring slump in the G7 following Labour’s first Budget.
Data from recruitment platform Indeed reveal that new job adverts in the UK have plunged by 12.3 per cent since the Chancellor delivered her maiden Budget in late October last year.
The fall is by far the steepest among comparable G7 nations, underlining how Britain has been left trailing its peers under Labour’s tax-and-spend agenda. Comparable figures were not available for Japan.
Economists say the collapse in hiring confidence has been driven directly by Labour policies that make employing staff more expensive.
Jack Kennedy, a senior economist at Indeed, pointed the finger squarely at Ms Reeves’s decisions.
He told the Telegraph: “There are really three policy drivers to that. The employer National Insurance contribution increase was obviously pretty consequential. We’ve had fairly large minimum wage increases and the Employment Rights Act. It’s a triple whammy that’s been contributing to that caution.”
Indeed’s measure looks at job postings that are no more than a week old, acting as a proxy for new hiring. It shows a sharp drop since October 2024, when Labour took charge of the economy.
Other major economies have seen far smaller falls. Vacancies are down 5.4pc in Germany, 4.4pc in France, and 3.2pc in the US. Italy has seen a 1.9pc drop, while Canada recorded a 9.9pc decline. Across the euro area as a whole, hiring is down 4.5pc.
Recruiters say the figures confirm Britain is now stuck in a “hiring recession”, with jobseekers facing uniquely tough conditions.
Before the Budget, bosses warned Labour’s plans to hike employers’ National Insurance would act as a “jobs tax”. Those warnings now look prescient.
Firms have been hit with a £26bn tax raid, an inflation-busting rise in the minimum wage, and a further 4pc increase to £12.71 an hour in April. The UK now has one of the highest minimum wages in the world.
The impact has been especially brutal for sectors such as hospitality and retail, which rely heavily on low-paid and part-time staff.
Mr Kennedy said: “In the UK, we’ve now got low-wage jobs trending weaker than high-wage jobs, which is really quite contrasting to what we see in other European economies. In France, Germany and Italy, low-wage job postings are still holding up better.
That certainly speaks to the pressures that sectors that employ fairly large numbers of low-wage workers have been facing. For me, that’s quite a telling data point.”
Indeed’s international data also show Britain performing worse than other wealthy countries outside the G7. Hiring fell just 1.2pc in the Netherlands and 2.5pc in Ireland, while it surged 18pc in Spain and rose 1.5pc in Australia.
The grim figures directly contradict Ms Reeves’s recent claims in Parliament that she is boosting hiring and helping young people into work. The Chancellor has also insisted there is no link between her employer tax rises and rising joblessness.
In reality, unemployment has climbed to a near five-year high of 5.1 per cent, redundancies are at their highest since Covid, and the economy shrank by 0.1pc in October, having flatlined since May.
Surveys suggest young people and graduates are being hit hardest by the hiring freeze.
Mr Kennedy said lower interest rates could offer some relief after the Bank of England cut rates to 3.75pc, but warned against expecting a quick turnaround.
He said: “Hopefully, interest rate cuts will continue in 2026, as long as inflation continues to subside. We probably would hope to see a little bit more confidence in the market, but I don’t really see an imminent, strong recovery. Really, what we need to see is clearly more growth in the economy.”
For now, critics say Labour’s economic experiment is leaving Britain with fewer jobs, weaker growth and workers paying the price.
