London Daily

Focus on the big picture.
Wednesday, Jul 16, 2025

UK Companies Slash Jobs Amid Economic Strain

New Labour Government’s Budget Sparks Fastest Workforce Reduction Since Pandemic
The United Kingdom finds itself grappling with mounting economic concerns as businesses cut staff numbers at a pace not seen since the height of the global financial crisis.

According to the latest data from the purchasing managers' index (PMI), a closely observed economic bellwether by both the Treasury and the Bank of England, employment levels tumbled in December at the fastest rate since 2009, spare only by the unprecedented disruption caused by the COVID-19 pandemic.

In a survey encompassing one thousand three hundred companies spanning both the manufacturing and service sectors, business leaders cite a trifecta of challenges: dwindling demand, escalating employment costs, and diminishing profit margins.

The result is a contraction in private sector employment, reflecting wider anxieties spurred by the new Labour administration's fiscal agenda.

Chris Williamson, chief business economist at S&P Global Market Intelligence, the entity responsible for compiling the PMI survey, highlighted a worrisome shift in economic sentiment.

"The robust expansion witnessed earlier in the year has withered," Williamson remarked.

He attributed this change to the adverse reactions from businesses and households to the Labour government’s policies and rhetoric.

A significant factor influencing these workforce reductions is the rise in national insurance contributions coupled with stricter employment regulations.

Expectations are high for the Office for Budget Responsibility's next report, due on the twenty-sixth of March, to shed further light on Chancellor Rachel Reeves’s budgetary impact on the economy.

Reactions to this budget are varied but pointed.

Business leaders caution that the announced twenty-five billion pounds rise in employer national insurance contributions from April will push firms towards hiring freezes, capped wage increases, and subsequent price hikes—a perspective the chancellor contests, arguing the tax hike is vital to cure public services and bridge a financial chasm inherited from preceding Conservative leadership.

As the economic landscape teeters, the Bank of England remains alert, balancing the twin pressures of inflation risks and potential labour market slack.

Any increase in company prices could perpetuate inflation, compelling the Bank to maintain higher interest rates.

Conversely, job cuts might ease labour market tensions, nudging rate cuts.

Currently, all eyes are on the Bank’s monetary policy committee, expected to hold interest rates at four point seven five percent this Thursday.

Despite cooling in recent months, the job market exhibits a stubborn resilience, with wage growth reaching noteworthy levels.

Upcoming official figures are anticipated to show steady unemployment with wage growth inching upwards, a testament to the juxtaposed robustness amidst cutbacks.

A Treasury spokesperson insists that the difficult decisions were essential for economic stability while affirming a commitment to fostering business growth, maintaining corporation tax at twenty-five percent, and ensuring conducive conditions for permanent capital expenditure.

As the government and businesses navigate these turbulent times, the narrative remains one of balancing immediate fiscal rectifications with long-term ambitions for sustainable growth.
Newsletter

Related Articles

0:00
0:00
Close
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Defends Attorney General Pam Bondi Amid Epstein Memo Backlash
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
King Charles Meets David Beckham at Chelsea Flower Show
If the Department is Really About Justice: Ghislaine Maxwell Should Be Freed Now
NYC Candidate Zohran Mamdani’s ‘Antifada’ Remarks Spark National Debate on Political Language and Economic Policy
President Trump Visits Flood-Ravaged Texas, Praises Community Strength and First Responders
From Mystery to Meltdown, Crisis Within the Trump Administration: Epstein Files Ignite A Deepening Rift at the Highest Levels of Government Reveals Chaos, Leaks, and Growing MAGA Backlash
Trump Slams Putin Over War Death Toll, Teases Major Russia Announcement
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
A 92-year-old woman, who felt she doesn't belong in a nursing home, escaped the death-camp by climbing a gate nearly 8 ft tall
French Journalist Acquitted in Controversial Case Involving Brigitte Macron
Elon Musk’s xAI Targets $200 Billion Valuation in New Fundraising Round
Kraft Heinz Considers Splitting Off Grocery Division Amid Strategic Review
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
EU Proposes New Tax on Large Companies to Boost Budget
Trump Imposes 35% Tariffs on Canadian Imports Amid Trade Tensions
Junior Doctors in the UK Prepare for Five-Day Strike Over Pay Disputes
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
Bitcoin Reaches New Milestone of $116,000
Biden’s Doctor Pleads the Fifth to Avoid Self-Incrimination on President’s Medical Fitness
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
×