British employers cut staff at a faster pace in April, according to two separate surveys, as higher employment costs and the repercussions of Donald Trump’s tariff war weighed on the economy.
Key Findings from the CIPD Survey
- The human resources association CIPD reported that 8% of employers made redundancies in April, up from 6% in March.
- A quarter of employers have frozen hiring plans due to uncertainty over Brexit and the impact of tariffs.
James Cockett, senior labour market economist at the CIPD, stated:
"The latest labour market data shows that employer confidence levels have slumped to an all-time low. This is likely to be driven by higher employment costs and shockwaves from Donald Trump’s tariff war."
Cockett emphasized that a recovery is uncertain as employers face additional costs from the government’s employment rights bill, which adds another layer of uncertainty to an already challenging business environment.
Challenges Facing Employers
Cockett outlined several significant challenges for employers:
- Rising energy prices
- Increased tax burden
- Greater regulation
He noted that these factors will continue to impact business confidence and hinder investment in the workforce.
Insights from BDO’s Business Barometer
In a separate survey, BDO’s monthly business barometer, which included 300 mid-market businesses across Britain, highlighted the pressures facing businesses:
- Manufacturing output fell by 3% in April compared to March.
- Services firms saw output decline by 1%.
BDO partner Scott Knight remarked:
"Confidence levels now at their weakest point in four years – comparable with those seen during national lockdowns."
Knight pointed out several factors contributing to the bleak outlook for UK businesses, including:
- Increased tax burden
- Greater regulation
- Global instability
He added that these issues are significantly affecting clients’ ability to grow their businesses.
Economic Context
Britain has been grappling with high inflation since Russia invaded Ukraine last year. Consumer spending has been severely impacted by rising prices for essential food items, such as bread and eggs, as well as fuel shortages caused by supply chain disruptions linked to Brexit-related border checks after Britain exited Europe’s single market earlier this year.
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