Employment falls as companies respond to Labour's NICs rise

UK businesses are cutting staff numbers at the fastest rate since the global financial crisis, according to a closely watched business survey that blames the government's tax-raising budget.

- Richard Partington Heather Stewart

The latest snapshot from the purchasing managers' index (PMI) survey, which is monitored by the Treasury and the Bank of England, showed employment levels fell in December at the fastest rate since 2009, excluding the period during the coronavirus pandemic.

The survey of 650 manufacturers and 650 service sector companies showed a combination of softer demand, rising employment costs and squeezed profit margins led to a reduction in private sector headcount.

"Economic growth momentum has been lost since the robust expansion seen earlier in the year, as businesses and households have responded negatively to the new Labour government's downbeat rhetoric and policies," said Chris Williamson, the chief business economist at S&P Global Market Intelligence, which compiles the PMI survey.