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Deccan Herald
2 hours ago
- Business
- Deccan Herald
UK employers report weaker hiring and pay growth in July
Hiring intentions by British businesses fell to their weakest since the Covid-19 pandemic and recruiters said starting pay was rising at the slowest pace in over four years, according to surveys on Monday which add to signs of a weakening jobs market. With the Bank of England watching the jobs market closely, the Chartered Institute of Personnel and Development said only 57% of private sector employers planned to recruit staff over the next three months, the lowest since the start of 2021 though only slightly down from 58% in the last quarterly survey. The professional body for the human resources sector said higher employer social security charges introduced by finance minister Rachel Reeves and an increased minimum wage were hurting jobs, particularly in hospitality and social care. Planned changes to employment law which are likely to make it harder to sack employees in their first two years in a job were also making businesses more reticent to hire younger, less experienced staff, CIPD economist James Cockett said. Other business surveys have shown similar concerns, as well as broader headwinds from weak domestic demand and residual uncertainty for some exporters over U.S. trade tariffs.
The Star
4 hours ago
- Business
- The Star
UK employers report weaker hiring and pay growth in July
LONDON: Hiring intentions by British businesses have fallen to their weakest since the Covid-19 pandemic and recruiters say starting pay is rising at the slowest pace in over four years, according to surveys, which add to signs of a weakening jobs market. With the Bank of England watching the jobs market closely, the Chartered Institute of Personnel and Development (CIPD) said yesterday only 57% of private sector employers planned to recruit staff over the next three months, the lowest since the start of 2021 though only slightly down from 58% in the last quarterly survey. The professional body for the human resources sector said higher employer social security charges introduced by Finance Minister Rachel Reeves and an increased minimum wage were hurting jobs, particularly in hospitality and social care. Planned changes to employment law which are likely to make it harder to sack employees in their first two years in a job were also making businesses more reticent to hire younger, less experienced staff, CIPD economist James Cockett said. Other business surveys have shown similar concerns, as well as broader headwinds from weak domestic demand and residual uncertainty for some exporters over US trade tariffs. Official data due today is likely to show the jobless rate in the three months to June held at 4.7%, close to a four-year high, according to a Reuters poll of economists who will be watching to see if pay growth slows as the Bank of England (BoE) expects. Four of nine BoE policymakers opposed its quarter-point interest rate cut to 4% last week and they are likely to need further convincing that domestic inflation pressures are easing. CIPD members expected to raise pay by a median 3% over the coming year, unchanged from the previous five quarters. Separately yesterday, the Recruitment and Employment Confederation (REC) said growth in starting salaries in July was the weakest since March 2021 while pay for temporary staff grew by the least in five months. 'Economic uncertainty, the complexities of artificial intelligence adoption and global headwinds are all weighing on business planning,' said Jon Holt, group chief executive at accountancy firm KPMG which sponsors the REC survey. REC said higher payroll costs and weak confidence contributed to a steep fall in permanent appointments in July. — Reuters
Telegraph
16 hours ago
- Business
- Telegraph
Hiring plans hit record low over Reeves tax raid fears
Hiring plans by British companies have crashed to a record low amid fears over a fresh tax raid by Rachel Reeves at this autumn's Budget, a new survey shows. On Monday, data from the Chartered Institute of Personnel and Development (CIPD) showed just 57pc of private sector firms planned to hire staff over the next three months – the lowest level since the survey began in 2016 outside of the pandemic. The figures underscore the gloomy mood among employers ahead of the Chancellor's set piece Budget this autumn. Ms Reeves could be forced to raise taxes by as much as £50bn, delivering a fresh blow to an already fragile economy and putting fresh pressure on employers still reeling from the £25bn National Insurance raid in the 2024 Budget. According to the CIPD poll of 2,000 companies, the number of private sector employers planning to recruit staff in the next three months fell to just 57pc last month from 65pc in autumn 2024. This is the lowest outside the pandemic, when 34pc planned to hire. A separate CIPD measure, which subtracts how many companies plan to hire from the share who are cutting staff, also plumbed fresh lows in July, with only a marginal improvement to nine percentage points, up from eight in spring. James Cockett, senior labour market economist at the CIPD, said business confidence was 'faltering further under rising employment costs,' particularly in sectors that traditionally offer vital early career opportunities. He also raised concerns about the Government's forthcoming Employment Rights Bill, which he said could add further complexity and cost to the hiring process. 'If new employment laws increase the risk and complexity of recruiting and managing new staff,' Cockett noted, 'employers are less likely to take a chance on young workers with limited experience and more development needs.' Bleak mood among employers The bleak economic picture was compounded on Monday by separate figures from KPMG and REC, which showed a steep drop in retail and hospitality job vacancies during July, as employers hit pause on hiring amid mounting cost pressures. Recruiters cited weak confidence in the economic outlook and rising payroll costs as key reasons behind the slowdown, while temporary hiring also fell at its fastest rate in five months. Jon Holt, chief executive at KPMG, said 'Many firms will continue to pause major investment decisions until there is greater clarity in the autumn.' Employers are struggling to overcome last year's tax rise, a large inflation-busting jump in the minimum wage and wider global nervousness sparked by Donald Trump's erratic trade war. The data offers a stark reflection of the mood among employers, particularly in sectors like retail and hospitality, where businesses are also grappling with looming regulatory upheaval. Kate Shoesmith, deputy chief executive of the Recruitment & Employment Confederation, warned: 'Hiring in retail and hospitality is down. Employers in these sectors are pausing due to cost pressures and uncertainty around employment law.' Nearly four in 10 firms that hire under-21s say recent changes to National Insurance contributions (NICs) have significantly raised their employment costs – despite younger workers being formally exempt. It comes after the minimum wage for 18 to 20-year-olds rose by 16.3pc in April, a 12.7pc boost in real terms, making employing young people far more expensive than previously. Labour market caution comes after Ms Reeves confirmed in last year's autumn Budget that employers' NICs would rise from 13.8pc to 15pc starting April 2025. This increase is adding further strain on sectors already vulnerable to wage pressures and big seasonal swings. According to UK Hospitality, the drastic decrease in vacancies results from changes to NICs, particularly the lowering of the threshold in last year's Budget which resulted in £3.4bn in annual cost for hospitality businesses. Since that announcement, 84,000 jobs have been lost in the sector.' A Treasury spokesman said: '380,000 jobs have been created since the start of this parliament; real wages rose more in the first ten months of this government than over the first 10 years of the previous government, and business confidence is the highest in 10 years according to a recent Lloyds Bank survey. 'Since the election, we have struck three major trade deals with the EU, US and India, business rates are being reformed, and corporation tax is capped at 25pc. 'This is how we are delivering on our Plan for Change to kickstart economic growth and put more money into working people's pockets.'
Business Times
21 hours ago
- Business
- Business Times
UK employers report weaker hiring and pay growth in July
[LONDON] Hiring intentions by British businesses fell to their weakest since the Covid-19 pandemic and recruiters said starting pay was rising at the slowest pace in over four years, according to surveys on Monday which add to signs of a weakening jobs market. With the Bank of England watching the jobs market closely, the Chartered Institute of Personnel and Development said only 57 per cent of private sector employers planned to recruit staff over the next three months, the lowest since the start of 2021 though only slightly down from 58 per cent in the last quarterly survey. The professional body for the human resources sector said higher employer social security charges introduced by finance minister Rachel Reeves and an increased minimum wage were hurting jobs, particularly in hospitality and social care. Planned changes to employment law which are likely to make it harder to sack employees in their first two years in a job were also making businesses more reticent to hire younger, less experienced staff, CIPD economist James Cockett said. Other business surveys have shown similar concerns, as well as broader headwinds from weak domestic demand and residual uncertainty for some exporters over US trade tariffs. Official data due on Tuesday is likely to show the jobless rate in the three months to June held at 4.7 per cent, close to a four-year high, according to a Reuters poll of economists who will also be watching to see if pay growth slows as the BoE expects. A NEWSLETTER FOR YOU Friday, 3 pm Thrive Money, career and life hacks to help young adults stay ahead of the curve. Sign Up Sign Up Four of nine BoE policymakers opposed its quarter-point interest rate cut to 4 per cent last week and they are likely to need further convincing that domestic inflation pressures are easing. CIPD members expected to raise pay by a median 3 per cent over the coming year, unchanged from the previous five quarters. Separately on Monday, the Recruitment and Employment Confederation said growth in starting salaries in July was the weakest since March 2021 while pay for temporary staff grew by the least in five months. 'Economic uncertainty, the complexities of AI adoption and global headwinds are all weighing on business planning,' said Jon Holt, group chief executive at accountancy firm KPMG which sponsors the REC survey. REC said higher payroll costs and weak confidence contributed to a steep fall in permanent appointments in July. REUTERS
The Independent
a day ago
- Business
- The Independent
Blow for Reeves as company hiring plans ‘at record low' in wake of national insurance hike
Rachel Reeves has been dealt a fresh blow on the economy as company hiring plans fall to a 'record low' following her national insurance contributions (NIC) hike. The Chartered Institute of Personnel and Development (CIPD) said just 57 per cent of private sector employers plan to recruit staff in the next three months, down from 65 per cent last autumn, as they battle rising costs. The influential monthly report by accountants KPMG and the Recruitment and Employment Federation (REC) also showed a "further steep decline" in permanent worker appointments last month, with recruiters blaming weak confidence in the economy and higher payroll costs. Anna Leach, the chief economist at the Institute of Directors, warned the trend 'could undermine the UK's weak growth outlook further, hitting both living standards and tax revenues '. The CIPD survey of 2000 employers found 84 per cent of UK businesses said their employment costs had risen since changes to NICs took effect in April 2025, while half of care and hospitality employers said those costs had risen to a large extent. Ben Caswell, senior economist at leading think tank the National Institute of Economic and Social Research (NIESR), said the findings suggest firms are dealing with the NI hike by cutting staff rather than raising prices, but warned these were now being driven upwards by the chancellor 's minimum wage rise, which came in in April. The central bank also blamed Ms Reeves's NI raid and the rise in the minimum wage for helping to push up the cost of the supermarket shop, as it slashed interest rates to 4 per cent in a bid to boost the UK's sluggish economy. Ms Reeves has also been warned of a £50bn black hole in the government's finances, which leading economists say means she may have to raise taxes, cut public spending, or tear up her fiscal rules in order to fill. On Sunday, she urged the public to be patient with Labour on the economy, saying that the change they voted for in last summer's election was 'never going to happen overnight'. James Cockett, senior labour market economist at the CIPD, said business confidence was 'faltering further under rising employment costs' and warned the situation could get worse. 'Looking ahead, some measures in the Employment Rights Bill risk adding further to the cost of employing people. This is why it's crucial that planned measures, such as the introduction of a new statutory probationary period and process for dismissing new staff, are carefully consulted on to ensure they can work in practice,' he said. Jon Holt, group chief executive and UK senior partner at KPMG, said: "The labour market cooled in July as chief execs held back from increasing their recruitment budgets. Economic uncertainty, the complexities of AI adoption and global headwinds are all weighing on business planning." Last month, ex-Manchester United footballer Gary Neville, who was a vocal backer of Labour at the last general election and appeared in a video endorsing Sir Keir Starmer, hit out at Reeves for her national insurance hike, saying it has hampered employment. Mr Neville, a businessman whose firms employ hundreds of people, said the chancellor had significantly increased the burden on businesses and that the national insurance increase was 'a challenge'. Daisy Cooper, the Lib Dem Treasury spokesperson, said the government's jobs tax was 'utterly misguided'. 'It's dealt an absolute hammer blow to businesses across the country, especially to vitally important people-intensive sectors such as social care and hospitality, forcing many to cut costs and pause recruitment,' she said. A HM Treasury spokesperson said 380,000 jobs had been created since the start of this parliament, while real wages rose more in the first ten months of Labour coming to power than over the first ten years of the previous government. They added business confidence was at its highest rate in ten years, according to a recent Lloyds Bank survey. 'Since the election, we have struck three major trade deals with the EU, US and India, business rates are being reformed, and corporation tax is capped at 25 per cent. This is how we are delivering on our Plan for Change to kickstart economic growth and put more money into working people's pockets,' they said.
