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UK employers cut staff numbers after the Labour government’s tax-raising Budget even as wage growth accelerated, official data showed on Tuesday.
Payrolled employment fell by 0.1 per cent between October and November and was 11,000 lower in the three months to November than in the previous quarter, according to figures from the Office for National Statistics.
Early estimates for December suggest a bigger month on month drop of 47,000 to 30.3mn in the payrolled workforce.
At the same time, average weekly earnings in the three months to November were 5.6 per cent higher than a year earlier, both including and excluding bonuses, the ONS said. Economists had expected 5.2 per cent.
The figures come as evidence mounts that economic growth has faltered following Rachel Reeves’ October Budget, in which businesses bore the brunt of £40bn in tax increases.
An increase in employers’ national insurance contributions and a rise in the minimum wage have combined to leave some sectors facing a sharp jump in costs when the measures take effect in April.
Surveys have suggested that businesses will try to offset higher costs by cutting jobs, squeezing wages or passing them on to consumers through higher prices.
Figures last week showed UK GDP grew a meagre 0.1 per cent in November, undershooting economists’ forecasts, after mild contractions in September and October.
The ONS survey based measure of employment also showed the unemployment rate rising to 4.4 per cent in the three months to November, from a previous 4.3 per cent, though this measure has recently been less reliable.
