Rachel Reeves has been hit by a fresh blow as UK businesses cut jobs at the fastest pace for almost four years. The downfall comes amid pressure from higher taxes and labour costs.
The Bank of England’s regulator survey of company finance chiefs shows UK firms cut employment by 0.5% over the three months to August. It represents the biggest drop in employment levels since September 2021.
Companies are also increasingly pessimistic about future employment amid concerns over the wider economic outlook.
The survey data shows they expect to reduce employment levels by 0.5% over the coming year, representing the weakest projection since October 2020.
UK firms cut employment by 0.5% over the three months to August.
It comes as firms continue to digest higher operating costs after a raft of policies from last year’s autumn budget came into force in April.
These included increases to the national minimum wage, national insurance contributions and business rates for many businesses.
Firms have also had to deal with heightened global trade tensions after US President Donald Trump launched his overhaul of US tariffs earlier this year.
Around two-thirds of businesses (66%) said they have seen lower profits since April.
The data shows 34% said they have increased prices and 46% have reduced their employment levels since the costs increases.
It comes amid continued speculation that the Chancellor may increase taxes further at the next Budget, due on November 26.