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Companies are slowing investment until they see more momentum in the economy, according to a closely-watched report on employment conditions which warns that budget measures are “acting as brakes” on hiring.
The Recruitment and Employment Confederation (REC) and KPMG’s latest snapshot on recruitment found permanent staff vacancies declined at the steepest rate since August 2020 last month.
“Consultants reported redundancies at clients, and that the higher cost of employing staff related to government policies had continued to weigh on hiring activity,” the study said.
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“Temp billings were especially hard hit, falling at the fastest rate since June 2020.”
Neil Carberry, REC’s chief executive, said firms were taking a “wait and see” approach to hiring until momentum in the
economy picked up.
“It takes time, and real action, to build business confidence,” he said.
“An autumn of fiscal gloom, difficulty navigating significant upcoming tax rises… are all acting as brakes on progress.”
The government warned of a “tough” budget ahead shortly after winning the election last July, claiming the Conservatives had left behind a £22bn black hole in the public finances.
October’s budget placed business on the hook for £25bn of £40bn in tax hikes, with the lion’s share coming from adjustments to employer national insurance contributions from April.
Business groups responded by warning the bill would hit investment and hiring. The additional costs could also be passed on in the form of higher prices, they said.
Official figures released last month…
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