Rachel from Accounts strikes again! Businesses are cutting jobs at the fastest pace in four years following Labour’s record tax-raising Budget, as (actual) economists warn of the rising risk of recession. The Telegraph has more.
A closely-watched survey showed bosses are preparing for “worse to come” in the new year amid a “triple whammy of gloomy news” that has seen growth grind to a halt and price rises gather pace.
Economists said companies were responding to the Chancellor’s £40 billion tax rise with a marked pull-back in hiring. Excluding the Covid pandemic, it was the fastest pace of job shedding since the global financial crisis in 2009.
While S&P Global’s latest barometer of private sector activity showed output barely grew in December at 50.5, just above the 50 level that divides growth from contraction, Chris Williamson, the Chief Business Economist at S&P Global Intelligence, said the economy was stagnating.
He said: “Economic growth momentum has been lost since the robust expansion seen earlier in the year, as businesses and households have responded negatively to the new Labour Government’s downbeat rhetoric and policies.
“Business confidence has sunk to a two-year low as companies weigh up a tougher outlook for sales alongside rising costs, notably for staff as a result of changes announced in the Budget.”
Mr. Williamson added: “Firms are responding to the increase in National Insurance contributions and new regulations around staffing with a marked pull-back in hiring.”
Worth reading in full.
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