Thousands axed as firms brace for massive National Insurance hike.
Britain is facing a jobs bloodbath as companies slash roles at the fastest pace since the 2009 financial crisis – barring the pandemic – following Chancellor Rachel Reeves’ bombshell Budget announcement of a staggering £40bn tax raid.
A closely watched survey revealed that private sector employment dropped for the fourth consecutive month in January. The S&P Global Flash UK purchasing managers index (PMI) showed firms are in full retreat as they brace for a £25bn hike in National Insurance, forcing a brutal cutback in recruitment plans.
The carnage comes just a day after supermarket giant Sainsbury’s revealed it will axe over 3,000 jobs in a desperate bid to balance the books. The supermarket chain confirmed head office and senior management roles would be among those slashed. It is also pulling the plug on 61 in-store cafes and shutting down hot food, patisserie, and pizza counters – all in an effort to slash costs in what it calls a “challenging cost environment.”
Sainsbury’s chief Simon Roberts had previously warned the Treasury’s tax grab would pile on a crippling annual bill of £140m from April just to cover the additional employer national insurance contributions. The company, which employs 148,000 people, is now feeling the pinch.
Industry leaders have issued stark warnings that Reeves’ tax rises will choke investment and crush jobs – harming the very workers the government claims to be protecting.
Chris Williamson, chief business economist at S&P Global, didn’t mince his words, stating: “The loss of confidence, combined with widespread concerns over higher staff costs associated with the Budget, pushed employment sharply lower again. Barring the job cutting seen during the pandemic, the rate of job losses signalled by the PMI over the past two months has been the highest since the global financial crisis in 2009.”
Meanwhile, financial experts fear there’s worse to come. As reported in the Telegraph, Elliott Jordan-Doak of Pantheon Macroeconomics warned the PMI figures spell disaster for the economy, with firms aggressively hiking prices to cover soaring payroll tax bills while slashing jobs left, right and centre.
“The MPC (Monetary Policy Committee) has to plot a middle ground,” Mr Jordan-Doak explained. “Keeping growth weak enough to bring inflation back to target in a reasonable time but without cratering the economy and undershooting the inflation target.”
Despite the gloom, traders still expect a slight interest rate cut next month from 4.75% to 4.5%, though optimism is dwindling as businesses face an uphill struggle against mounting costs.
As fears of more layoffs spread across the country, workers and businesses alike are left wondering – how much more can they take?
The Labour Party are good for the UK. Me and my boyfriend agree that is Trump’s America First Trade Tariffs that are damaging the UK economy..