Employment across the private sector has fallen at the fastest rate since the middle of the Covid-19 pandemic, S&P Global reported on Monday.
In December, staffing numbers saw the steepest decline since January 2021, S&P’s latest flash UK purchasing managing index (PMI) data showed.
This also marked the third successive month of declining employment levels, largely driven by workers leaving and not being replaced due to growing costs.
“Business confidence has sunk to a two-year low as companies weigh up a tougher outlook for sales alongside rising costs, notably for staff as a result of changes announced in the Budget,” S&P economist Chris Williamson commented.
“Firms are responding to the increase in national Insurance contributions and new regulations around staffing with a marked pull-back in hiring.”
S&P also highlighted indications that inflation was turning higher once more as growth stagnated across the UK economy.
Overall, the PMI reading was unchanged at 50.5 and remained just within growth territory, as service sector activity increased but manufacturing output declined.
“Businesses are reporting a triple whammy of gloomy news as 2024 comes to a close, with economic growth stalled, employment slumping and inflation back on the rise,” Williamson added.