Businesses cut jobs at the quickest rate for four years this summer and reported the worst employment outlook since the pandemic, pointing to the impact of chancellor Rachel Reeves’ decision to raise payroll taxes.
Companies reduced employment by an annual rate of 0.5 per cent in the three months to August, the worst figure since 2021, according to a Bank of England survey of chief financial officers published yesterday. Last month, businesses also told the central bank they expected to cut employment by 0.5 per cent in the year ahead. This is the worst reading since October 2020, when the economy was starting to recover from Covid-19 and some restrictions were still in place.
Businesses have blamed tax increases in Reeves’ first Budget last October for the pullback in hiring, which has been reported in a string of other surveys.
A £25bn increase in national insurance contributions, announced in the fiscal event, took effect in April along with a rise in the minimum wage.
Information
- Show
- FrequencyUpdated daily
- Published7 October 2025 at 23:00 UTC
- Length1 min
- Episode2
- RatingClean