The unemployment rate in Britain surged after the country's private employers acted to cut jobs for 11 consecutive months, following the Labour government's increase in national insurance (NI) tax.
A report by financial firm S&P Global revealed that workforce reductions occurred at an "aggressive" pace throughout August, with more than 200,000 people joining the ranks of the unemployed since the general election.
An increase in employer NI tax from 13.8% to 15% and a reduction in the salary threshold from £9,100 to £5,000 have increased the cost of hiring, particularly in the retail and hospitality sectors that rely on low-paid workers.
While the business activity index recorded its fastest growth in a year, S&P said the rise was overshadowed by concerns about labour costs and inflation, which is now at an 18-month high.
S&P Global chief business economist Chris Williamson said job cuts were expected to continue as employers faced “weak bookings” and operating cost pressures.
Meanwhile, data from the Recruitment Consortium showed new job postings fell 9.2% in July from the previous month, adding to concerns about the job market outlook.
