Sluggish Wage Advancement with Reeves Proposing Additional Tax Increases
The British economy is facing a challenging outlook, with hiring slowing down at the worst rate in four years since the pandemic, according to recent reports. This slowdown can be attributed to the recent Budget presented by Shadow Chancellor Rachel Reeves.
The jobs market in Britain is painting a bleaker picture, with a decreasing number of people on company payrolls and high unemployment. The Office for National Statistics (ONS) reported that the labour market is cooling, with a decrease in the number of people on payroll and fewer jobs available. This trend continued in August, with another 8,000 jobs lost.
The ONS also reported a record high public borrowing of £20.7 billion in June alone. This is a significant increase compared to June last year and higher than the Office for Budget Responsibility (OBR) had anticipated. The Treasury borrowed £6.6 billion more than in June last year and £3.5 billion higher than the OBR had anticipated.
Economists expect Rachel Reeves, the Labour Shadow Chancellor, to hike taxes again in her November 26 Budget. Deutsche Bank has warned that the UK's job market is taking a battering due to Chancellor Rachel Reeves' tax-raising Budget. In particular, the soaring National Insurance contributions set to come into effect from April next year are expected to impact businesses.
The state pension in Britain could soon see a bigger rise due to the triple lock mechanism, which is based on the figure used to set the state pension and the current low wage growth rate. However, the average regular earnings excluding bonuses in Britain grew by 4.8% in July, the slowest pace since June 2022. Total pay including bonuses grew by 4.7% in July.
Unemployment in Britain is currently at 4.7% in the three months to July. While this is lower than the pre-pandemic level, it is still a concern for policymakers who are working to stimulate job growth and reduce unemployment further.
It is worth noting that there is no specific information available about an economist who conducted an analysis on the impact of Chancellor Rachel Reeves's National Insurance contributions on the UK labor market development.
ONS chief Liz McKeown admitted that the labour market continues to cool, with the number of people on payroll falling again and fewer jobs available. Deutsche Bank predicted that Rachel Reeves' decision to hike National Insurance (NI) contributions could result in the loss of up to 100,000 jobs. Since the £40billion tax raid in last year's Budget, payrolled employment in Britain has slumped by 153,000.
In conclusion, the British economy is facing a challenging outlook, with hiring slowing down and the jobs market cooling. The record high public borrowing under Labour is also a concern for policymakers who are working to stimulate job growth and reduce unemployment. The impact of the upcoming Budget and the soaring National Insurance contributions on the UK labor market development remains to be seen.
Read also:
- Susanne Otto to Develop Additional Housing Units
- Deepwater Port Construction Permits for Projects within the South Central Region's Air Regulations
- Citizen Thekla Walker, Minister, urges: "Let's face our responsibilities at home"
- Editorial Correspondence: Justifying the Elimination of a Program Earmarked for Reducing Our Own Carbon Footprint?
