[ad_1]
There are more people looking for fewer jobs in Britain today than there were a year ago.
That is the bleak record the chancellor will have to defend as she prepares for her budget in two weeks’ time.
The Treasury has not yet responded to the latest labour market figures, which contain very few silver linings.
The unemployment rate hit 5%, rising faster than economists were expecting. Vacancies have fallen over the past year and, while economic inactivity has fallen over the past year, it remains high by historic standards.
Money latest: New bank switch offer ‘blows competition out of the water’
When things take a wrong turn in the economy, governments are first in line for the blame – sometimes unfairly. In this case, however, the role of government policy is clear.
Within a few months of coming to power, Rachel Reeves launched a big tax raid on businesses to support the public finances. The centrepiece was a £25bn increase in employers’ national insurance contribution and an increase in the national living wage.
At the time, employers in some of the most exposed sectors, like retail and hospitality, warned they would have to pass on costs to consumers and cut the size of their workforce, placing upwards pressure on inflation and unemployment.
Sainsburys and M&S said prices would rise, while business surveys repeatedly pointed to a slowdown in hiring.
The Treasury was prepared to call their bluff. Some in the department thought that businesses would absorb the costs, eating into their profits before passing on costs in competitive, price sensitive sectors like retail and hospitality.
That hasn’t…
[ad_2]
