UK Firms Plan Largest Job Cuts Since 2013 as Economic Confidence Plummets

British employers are preparing to implement the most significant wave of redundancies in a decade as business confidence deteriorates amid looming tax increases scheduled for April, following Rachel Reeves’ autumn budget announcements.

The Chartered Institute of Personnel and Development’s latest survey of 2,000 employers reveals redundancy intentions have reached their highest level in 10 years, excluding the Covid-19 pandemic period. This development places additional pressure on the chancellor, whose economic growth strategies are increasingly scrutinised following recent weak economic indicators.

Most organisations cite the rise in employer national insurance contributions and a 6.7% increase in the “national living wage” as primary factors behind their decisions. The survey indicates that 32% of employers intend to reduce their workforce through redundancies or decreased recruitment efforts.

The Federation of Small Businesses reports a dramatic decline in confidence levels, with their sentiment index plummeting from -24.4 points to -64.5 points. The hospitality sector appears particularly vulnerable, recording the lowest confidence rating at -111.0 points.

The British Beer and Pub Association presents a concerning picture for the hospitality industry, reporting that six pubs ceased operations weekly throughout the previous year, resulting in approximately 4,500 job losses nationwide. The association warns that October’s budget measures will impose an additional £650 million in costs on the sector.

Economic forecasts suggest inflation will increase to 2.8% in January from December’s 2.5%, while unemployment is expected to rise to 4.5%. These indicators point towards a challenging period ahead for British businesses and workers, as companies reassess their operational costs and workforce requirements in response to mounting financial pressures.