Staff layoffs in UK increase due to rising labor costs and Trump's trade war

From Yahoo Finance: 2025-05-11 19:00:00

UK employers laid off staff at a faster pace in April due to higher employment costs and Trump’s tariff war. CIPD reported record-low employer confidence, leading to job cuts and hiring freezes. The UK faces uncertainty with NICs and national living wage increases, impacting optimism and hiring projections.

Employers are cautious about increasing headcount in the next three months. A BDO survey of small and medium-sized businesses revealed declining output, mirroring weak confidence levels. Chancellor Rachel Reeves hopes for a confidence rebound post-interest rate cuts and trade agreements with the US and India.

CIPD warns that recovery isn’t guaranteed due to upcoming employment rights bill costs. Large private sector employers and retail are the most affected, with a decline in hiring expectations. KPMG and REC found weakened staff demand, signaling ongoing challenges for businesses amidst global instability.

BDO’s Scott Knight highlights the burden of increased taxes and regulation on UK businesses, hindering planning and investment. The Bank’s interest rate cut aims to provide stability, but the impact of NICs and wage increases on employment remains uncertain. Employers may offset costs through lower wage rises and higher prices.

The Treasury assures stability for businesses, citing trade deals with India and the US as beneficial. Measures like business rates relief and interest rate cuts aim to support businesses. The government aims to encourage investment and protect small businesses from NIC increases.



Read more at Yahoo Finance: Staff layoffs in UK gain pace amid Trump tariff turmoil and labour cost increases