{"id":57092,"date":"2025-10-02T12:09:07","date_gmt":"2025-10-02T12:09:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/57092\/"},"modified":"2025-10-02T12:09:07","modified_gmt":"2025-10-02T12:09:07","slug":"uk-businesses-cut-jobs-for-fourth-consecutive-month-boe-survey-shows","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/57092\/","title":{"rendered":"UK businesses cut jobs for fourth consecutive month, BoE survey shows"},"content":{"rendered":"

Stay informed with free updates<\/p>\n

Simply sign up to the UK employment myFT Digest — delivered directly to your inbox.<\/p>\n

UK businesses cut jobs for the fourth consecutive month in September in the longest single period of falling employment since 2021, in a sign of the continuing impact of Rachel Reeves\u2019 increase in payroll taxes last year. <\/p>\n

British companies reduced employment by an annual rate of 0.4 per cent last month, according to a Bank of England survey of chief financial officers published on Thursday. The fall followed declines in the previous three months and reversed the almost continuous expansion in jobs since September 2021. <\/p>\n

Businesses\u2019 expectations of annual growth in headcount dropped to zero in the three months to September, the worst outlook since the start of the year and the joint lowest since 2020, when Covid-19<\/a> led to a rise in lay-offs. <\/p>\n

Businesses have blamed tax increases in Reeves\u2019 first Budget<\/a> last October for the pullback in hiring, which has been reported in a string of other surveys. A \u00a325bn rise in national insurance contributions, announced in the fiscal event, took effect in April along with a rise in the minimum wage.<\/p>\n

After last year\u2019s fiscal event, which raised taxes by \u00a340bn in total, Reeves said she would \u201cnot be coming back with more tax increases\u201d. <\/p>\n

But on Monday Downing Street refused to rule out the possibility that Reeves would break Labour\u2019s manifesto pledge to not increase income tax, value added tax or national insurance rates in order to help fill a fiscal hole of as much as \u00a330bn.<\/p>\n

\u201cEveryone can see in the last year the world has changed and we\u2019re not immune to that change,\u201d Reeves told the Labour party conference. <\/p>\n

The BoE survey, which covered 2,000 companies and was conducted in the first half of September, suggested the increase in employer NICs and the minimum wage was adding to pressures on wages and prices. <\/p>\n

\"Line<\/p>\n

Companies lifted prices at a faster rate last month than in August, according to the survey, forecasting price growth of 3.7 per cent in the year ahead, up from 3.5 per cent previously. Business inflation expectations for the year ahead also edged up. <\/p>\n

Meanwhile, business wage growth expectations for year ahead, a key indicator of underlying inflation, remained elevated at an annual rate of 3.6 per cent in the three months to September, according to the survey. <\/p>\n

Robert Wood, economist at Pantheon Macroeconomics, a consultancy, said: \u201cEmployment falls fail to open spare capacity so wage and price pressures remain stubbornly too high.\u201d<\/p>\n

Recommended<\/p>\n

\"Lord<\/a><\/p>\n

The BoE survey would keep the Monetary Policy Committee \u201ccautious\u201d, he added, noting that the figures were consistent with no more interest rate cuts this year \u2014 as priced in by financial markets.<\/p>\n

This week, Sarah Breeden, BoE deputy governor, said<\/a> the BoE should reduce inflation without hitting jobs and output. <\/p>\n

Asked about their reaction to the increase in NICs, 42 per cent of companies surveyed said they were cutting headcount, while 38 per cent reported increasing prices. Two-thirds of businesses reported lowering profit margins. <\/p>\n

A quarter of businesses said they were cutting jobs in response to the rise in the minimum wage, with 37 per cent reporting putting up prices. <\/p>\n

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