Recent economic indicators reveal stalled growth, rising national debt, and declining business confidence in the UK. Companies face closures, job losses mount, and benefit claims increase rapidly.
Impact of Employer National Insurance Increase
A £26 billion rise in employer National Insurance contributions has pressured profits, reduced hiring, and affected livelihoods. Unemployment has climbed from 4.1% to 5.2%, with projections indicating further increases.
Employment Rights Bill Takes Effect
On February 18, initial provisions of the Employment Rights Bill, led by Deputy Prime Minister Angela Rayner, enter into force. Designed to enhance worker protections, the measures introduce an estimated £5 billion in additional costs for employers.
Businesses already under strain now face heightened regulation, increased union activity, and a surge in employment tribunal cases, potentially accelerating job losses and hindering recruitment.
Youth Job Market Challenges Amid AI Advances
Artificial intelligence poses risks to millions of jobs, particularly entry-level positions, as automation accelerates. Youth unemployment reaches 16.1%, the highest in over a decade, surpassing rates in many European countries.
Failure to secure early career footholds can have lifelong consequences for young workers.
Public Sector Expansion Contrasts Private Sector Pressures
The public sector sees robust growth, with nearly 90,000 new jobs created since the government change. Public sector pay rises 7.4% in the three months to December, outpacing the private sector’s 3.2% increase.
Despite flatlined productivity, the public sector expands through increased borrowing. Meanwhile, the private sector, which funds public services via taxes and generates higher productivity gains, contracts rapidly.
Welfare Claims Surge
Sickness benefit recipients rise from 3.5 million to 4.2 million, with 8.4 million people now receiving some form of welfare support. The private sector bears these costs amid its own challenges.
