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Telegraph
3 days ago
- Business
- Telegraph
Reeves could be remembered as the Chancellor who destroyed our pubs
Businesses have been hit hard by the Government's increase in employer national insurance contributions and a higher minimum wage. Their profit margins are squeezed and they are forced to lay off staff or not recruit new ones. How that helps in the pursuit of growth is anyone's guess. The impact of the Chancellor's ill-starred Budget last autumn is being felt everywhere, not least in the retail sector where high street shops are all cutting jobs. Tesco is closing some of its stores early after facing a £235 million increase in staff costs, and it will not be the only supermarket chain looking at ways to mitigate the impact. The British Retail Consortium estimates the total financial hit to the sector is around £7 billion. But there is one sector that is particularly feeling the pinch: hospitality. One in three pubs and restaurants is now said to be losing money. This is at a time when the future of many pubs was already jeopardised by changing drinking habits, with an average of 80 closing their doors every month. Pubs are vital community assets, the beating heart of many towns and villages that have already been hollowed out by the loss of shops and post offices. The pandemic hit the sector particularly hard, with prolonged closures and restrictions reducing profits even if they did get financial help. Supply chain disruptions, high inflation and soaring energy costs have added to their woes. To have piled even greater pressure at such a time was an ultimately self-defeating decision by Rachel Reeves, since the revenues that would accrue from business and their staff will no longer be available if they close. To be remembered as the Chancellor who closed the pubs is not a legacy she would want.
The Independent
27-05-2025
- Business
- The Independent
UK businesses warn of more job cuts as confidence drops following tax rises
Retailers in the UK are preparing to raise prices, reduce their workforce and slash investment as a new survey reveals the sharpest drop in sentiment across the sector since the pandemic. According to research by the Confederation of British Industry (CBI), employment across retailers declined in the year to May, and is expected to fall faster next month. The CBI's quarterly industry gauge showed that firms also expect to cut back on investment plans in the next 12 months, while they also anticipate that price rises will continue to accelerate in June. Retailers have been hit by rising costs after the Government increased company national insurance contributions (Nics) in April, a tax which makes it more expensive to employ people. The minimum wage also increased at the same time, while consumer confidence remains low after hitting a record low in April, according to some surveys. In the wake of the changes, confidence across the retail sector has fallen at the sharpest pace in five years. The CBI said a net balance of companies expecting business to worsen over the next three months stood at minus 29 per cent, down from a reading of minus 19 per cent in February. The balance of firms that expect prices to increase at an accelerated rate next month was 57 per cent. Ben Jones, lead economist at the CBI, said: 'This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector.' Firms are 'feeling the impact of higher Nics and the national living wage increase', he added. 'In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand, though online sales seem to be holding up better. 'Our quarterly survey suggests that retailers are cutting back on hiring, scaling back investment and expect to increase selling prices at the fastest pace for over a year. The net balance of firms expecting a decline in headcount next month was minus 20 per cent, while those expecting to scale back investment was minus 47 per cent.
The Independent
27-05-2025
- Business
- The Independent
Retailers expect more job cuts amid plummeting sentiment following tax rises
Retailers are expecting to hike prices, cut jobs and slash investment amid the sharpest drop in sentiment across the sector since the pandemic, according to a survey. Research by the Confederation of British Industry (CBI) suggested employment across retailers declined in the year to May, and headcount is expected to fall faster next month. Firms said they also expect to cut back on investment plans in the next 12 months, while they also anticipate that price rises will continue to accelerate in June, according to the CBI's quarterly industry gauge. Retailers have been hit by rising costs after the Government hiked company national insurance contributions (Nics), a tax which makes it more expensive to employ people, in April. The minimum wage also increased at the same time, while consumer confidence remains low after hitting a record low in April, according to some surveys. In the wake of the changes, confidence across the retail sector has fallen at the sharpest pace in five years. The CBI said a net balance of companies expecting business to worsen over the next three months standing at minus 29%, down from a reading of minus 19% in February. Ben Jones, lead economist at the CBI, said: 'This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector.' Firms are 'feeling the impact of higher Nics and the national living wage increase', he added. 'In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand, though online sales seem to be holding up better. 'Our quarterly survey suggests that retailers are cutting back on hiring, scaling back investment and expect to increase selling prices at the fastest pace for over a year. The net balance of firms expecting a decline in headcount next month was minus 20%, while those expecting to scale back investment was minus 47%.
Yahoo
22-05-2025
- Business
- Yahoo
UK government borrowing hits £20.2bn in April
Government borrowing came in higher than expected in April, official figures showed, despite an increase in employer national insurance contributions coming into effect last month. Borrowing — the difference between spending and income from taxes — came in at £20.2bn in April, which was up £1bn from the same month last year, according to the Office for National Statistics (ONS). This was also higher than the consensus forecast of £17.9bn, according to Capital Economics. "April's public finances figures showed that despite the boost from the rise in employers' national insurance contributions (NICs), the fiscal year got off to a poor start," said Ruth Gregory, deputy chief UK economist for Capital Economics. "This raises the chances that if the chancellor wishes to stick to her fiscal rules, more tax hikes in the autumn budget will be required." Chancellor Rachel Reeves announced that an increase in employer NICs in her first autumn budget in October, which kicked in last month. The ONS said that borrowing for the financial year ended in March was estimated at £148.3bn, which was £3.7bn lower than its initial estimate published last month. That figure was £11bn more than the £137.3bn predicted by the UK's official forecaster, the Office for Budget Responsibility (OBR). Rob Doody, deputy director for public sector finances at the ONS, said: "At £1bn higher than the same time last year, this April's borrowing was the fourth highest for the start of the financial year since monthly records began more than 30 years ago. "Receipts were up on last April, thanks partly to the highest rate of national insurance contributions. However, this was outweighed by greater spending due to rising public services' running costs and increases in many benefits and state pensions." Read more: More interest rate cuts in doubt after surprise inflation surge The ONS said the UK's current budget deficit — which refers to borrowing to fund day-to-day public sector activities — in the financial year ended in March was estimated to be £70.3bn. This figure was £4.3bn lower than its initial estimate released last month and £9.6bn more than the £60.7bn forecast by the OBR. Public sector net debt, excluding public sector banks, was estimated to be 95.5% of the UK's gross domestic product (GDP) at the end of April and remained at the highest level since the early 1960s. Darren Jones, chief secretary to the Treasury, said: "After years of economic instability crippling the public purse, we have taken the decisions to stabilise our public finances, which has helped deliver four interest rate cuts since August, cutting the cost of borrowing for businesses and working people." Read more: What are Trump's guests getting from $148m crypto dinner? Best credit card deals of the week, 21 May Rachel Reeves rules out cutting ISA limit but remains vague on cash savingsSign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
UK government borrowing hits £20.2bn in April
Government borrowing came in higher than expected in April, official figures showed, despite an increase in employer national insurance contributions coming into effect last month. Borrowing — the difference between spending and income from taxes — came in at £20.2bn in April, which was up £1bn from the same month last year, according to the Office for National Statistics (ONS). This was also higher than the consensus forecast of £17.9bn, according to Capital Economics. "April's public finances figures showed that despite the boost from the rise in employers' national insurance contributions (NICs), the fiscal year got off to a poor start," said Ruth Gregory, deputy chief UK economist for Capital Economics. "This raises the chances that if the chancellor wishes to stick to her fiscal rules, more tax hikes in the autumn budget will be required." Chancellor Rachel Reeves announced that an increase in employer NICs in her first autumn budget in October, which kicked in last month. The ONS said that borrowing for the financial year ended in March was estimated at £148.3bn, which was £3.7bn lower than its initial estimate published last month. That figure was £11bn more than the £137.3bn predicted by the UK's official forecaster, the Office for Budget Responsibility (OBR). Rob Doody, deputy director for public sector finances at the ONS, said: "At £1bn higher than the same time last year, this April's borrowing was the fourth highest for the start of the financial year since monthly records began more than 30 years ago. "Receipts were up on last April, thanks partly to the highest rate of national insurance contributions. However, this was outweighed by greater spending due to rising public services' running costs and increases in many benefits and state pensions." Read more: More interest rate cuts in doubt after surprise inflation surge The ONS said the UK's current budget deficit — which refers to borrowing to fund day-to-day public sector activities — in the financial year ended in March was estimated to be £70.3bn. This figure was £4.3bn lower than its initial estimate released last month and £9.6bn more than the £60.7bn forecast by the OBR. Public sector net debt, excluding public sector banks, was estimated to be 95.5% of the UK's gross domestic product (GDP) at the end of April and remained at the highest level since the early 1960s. Darren Jones, chief secretary to the Treasury, said: "After years of economic instability crippling the public purse, we have taken the decisions to stabilise our public finances, which has helped deliver four interest rate cuts since August, cutting the cost of borrowing for businesses and working people." Read more: What are Trump's guests getting from $148m crypto dinner? Best credit card deals of the week, 21 May Rachel Reeves rules out cutting ISA limit but remains vague on cash savingsError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
