Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK jobless rate edges higher as Reeves’s tax rise stalls hiring

by January 21, 2025
January 21, 2025
UK jobless rate edges higher as Reeves’s tax rise stalls hiring

Unemployment has edged higher in the UK while the number of job vacancies has fallen to its lowest level in more than three years, signalling that employers pulled back on hiring after Chancellor Rachel Reeves’s October budget hiked national insurance contributions.

Fresh figures from the Office for National Statistics (ONS) show that the unemployment rate nudged up to 4.4 per cent from 4.3 per cent in the quarter to December, as vacancies declined by 24,000 to 812,000. Payrolled employees fell by 47,000 in December to 30.3 million — the steepest drop since November 2020.

Economists say the slowdown reflects looming tax pressures on businesses. From April, national insurance will rise from 13.8 per cent to 15 per cent, while the earnings threshold at which the levy kicks in will shrink from £9,100 to £5,000. KPMG UK’s chief economist, Yael Selfin, explained that these forthcoming tax rises have prompted employers to put the brakes on hiring, warning: “We expect this to act as a headwind for labour market activity in the near term, likely translating into a slight rise in unemployment.”

Despite the fall in vacancies, pay excluding bonuses grew to 5.6 per cent — a six-month high — and ahead of analysts’ forecasts. With inflation dipping to 2.5 per cent, real wages continue to climb, offering some relief to households grappling with the cost of living. However, this buoyant pay growth could complicate the Bank of England’s next move on interest rates. Although inflation has dropped more sharply than expected and GDP growth remains tepid at 0.1 per cent, pay rising at this pace might limit the extent of any rate cut.

Thomas Pugh, economist at RSM UK, believes the central bank will likely place more weight on lacklustre growth and moderating inflation, maintaining that a 25 basis-point rate cut at the February meeting is “still a sure bet.” Yet the robust wage data may keep policymakers cautious in the months ahead.

Liz McKeown, the ONS’s director of economic statistics, pointed out that while vacancies have now fallen for a 30th consecutive period, they are still slightly above pre-pandemic levels. Concerns over data quality do remain, with response rates to the labour market survey having declined, but the broad picture suggests that employers — facing higher costs from April — are already tightening their hiring plans.

Read more:
UK jobless rate edges higher as Reeves’s tax rise stalls hiring

0
FacebookTwitterGoogle +Pinterest
previous post
Trump nominees Collins, Stefanik to face senate grilling as VA, UN picks; Bessent gets committee vote
next post
Two-thirds of British entrepreneurs back Trump’s ‘good for business’ presidency

You may also like

NatWest repays fees charged on incorrect loans

September 1, 2022

Young entrepreneur, George Jones, transforms £11m Manchester office...

September 19, 2023

Energy bosses meet with Grant Shapps amid debate...

August 2, 2023

Rachel Reeves to cut £1.5bn in civil service...

March 24, 2025

Getting to Know You: Ivo Gueorguiev, Co-founder, Paynetics

August 1, 2024

Over half of job seekers in the UK...

September 7, 2023

The Business of Online Gaming: How Digital Gaming...

December 10, 2024

Konstantin Tserazov: Global Breakthroughs in Fintech Reshaping the...

February 26, 2024

Recession uncertainty tames UK business confidence upward movement

June 2, 2023

HMRC withheld offshore tax avoidance figures for UK’s...

July 7, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Getting It Half-Baked: The Real Cause of Cannabis Market Failures

      June 6, 2025
    • I Shot the Tariff (But I Swear It Was in Self-Defense)

      June 6, 2025
    • Mike Johnson says he hopes Trump, Musk ‘reconcile’ amid ongoing feud

      June 6, 2025
    • Trump signs new executive orders intended to make flying cars a reality, slash flight times

      June 6, 2025
    • WATCH: Republicans rally behind Trump, continue to support Musk amid ‘big, beautiful’ brawl

      June 6, 2025
    • Deportations to Add Almost $1 Trillion in Costs to the “Big Beautiful Bill”

      June 6, 2025

    Categories

    • Business (8,149)
    • Investing (2,019)
    • Politics (15,552)
    • Stocks (3,132)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved