LONDON, Oct. 15 (Xinhua) -- Britain’s labor market is caught in a lingering downturn as employers halt hiring plans due to soaring employment costs, experts said this week.
As the cost of living rises, combined with high inflation, a change of policy direction is highly expected when the Autumn Budget is due to be delivered next month.
LOOSE JOB MARKET &SHORTAGE OF SKILLED WORKERS
The country’s unemployment rate for people aged 16 years and over was estimated at 4.8 percent from June to August 2025. The figure went up in the latest quarter and is above estimates from a year ago as well as pre-pandemic rates, data from the Office for National Statistics (ONS) showed Tuesday.
Meanwhile, the estimated number of job vacancies fell by 9,000 to 717,000 in July to September, down by 13.8 percent year-on-year, with vacancies decreasing in nine out of 18 industry sectors. This also marked the 39th consecutive period when vacancy numbers have dropped compared with the previous three months, according to the ONS.
Jane Gratton, deputy director of public policy at the British Chambers of Commerce (BCC), commented that the continuous rise of unemployment, combined with a sustained fall in job vacancies, clearly demonstrates that "employers are holding back on recruitment under the burden of soaring employment costs."
According to the BBC, there is also a severe shortage of skilled workers in the manufacturing, construction, hospitality, and healthcare sectors.
POLICY CHANGE EXPECTED
The current sluggish labor market in Britain also reflects the difficulties that the government policy has brought to the businesses, local analysts pointed out.
To balance the budget and raise revenue, the government chose to increase employers’ National Insurance contributions, raising an additional 25 billion pounds (33.39 billion U.S. dollars) from businesses in the new fiscal year that began in April. In addition, to protect workers’ rights, the government tightened rules on employee dismissals.
Business owners say these measures have significantly increased operational burdens while disregarding their concerns. A recent BCC survey indicated that labor costs remain the biggest cost pressure on small and medium-sized enterprises, cited by 72 percent of firms.
"Taken together, the Employment Rights Bill, the increase in employer National Insurance Contributions, and above-inflation increases to the National Living Wage are having the very impact businesses have been warning about for a long time: directly increasing the cost and risk of employing staff and undermining job creation," said Alex Hall-Chen, principal policy advisor for employment at the Institute of Directors.
The institute’s survey of 588 business leaders in September found that half of the businesses that saw an increased national insurance bill from April have responded by reducing employment.
A key concern for employers is whether the upcoming Autumn Budget will further increase the costs for businesses.
"Last year’s budget took the wind from their sails, and they have been struggling to find momentum ever since," said Shevaun Haviland, BCC director general. "Right now, many firms feel drained. They cannot plan ahead as they expect further tax demands to be laid at their feet."
Haviland warned that "this year’s budget will be a make-or-break moment for many firms," as they need the Chancellor to stop any further tax rises on businesses.
Hall-Chen stressed that if the government wishes to stimulate growth and support job creation, it must change its current policy direction. The Chancellor should refrain from imposing new business taxes in the upcoming Budget and begin meaningful dialogue with employers to minimize the negative impact of the Employment Rights Act on job creation and economic growth.
The market remains challenging for employers who are still waiting for a real upturn in economic confidence, said Neil Carberry, chief executive of the Recruitment and Employment Confederation. He noted that "employers are lurking in the shadows of the labor market waiting for better news on the wider economy before they come out into the light."
Employers’ reluctance to hire new staff resulted in fewer opportunities for job-seekers, while stubbornly high inflation almost offset recent income growth, elevating the cost-of-living for those in employment over the autumn.
Charlie McCurdy, economist at the Resolution Foundation, underlined the weak income growth after adjusting for inflation, noting that "real weekly wages have grown by just 1.5 pounds in total since last September, which is barely enough to cover the cost of a Greggs sausage roll."
However, given the current fiscal situation, further tax hikes may be unavoidable in the upcoming budget. ONS data released on Sept. 19 showed that in August, UK public borrowing was 3.5 billion pounds higher than a year earlier, and the government’s debt-to-GDP ratio had risen to 96.4 percent, up 0.5 percentage points from the same period last year.
A report from the Institute for Fiscal Studies suggests that the Chancellor is likely to raise taxes in the forthcoming Budget. Since businesses can no longer bear additional burdens, the focus of new tax increases may shift toward individuals - including higher personal income taxes. (1 pound = 1.34 U.S. dollar)
原文地址：http://en.people.cn/n3/2025/1016/c90000-20377982.html