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Thousands of jobs have been lost. Businesses don't want to hire more people. Official policy makers
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appear to be on the edge. This is a country set to suffer the highest tax burden ever on record
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and those pressures on the economy are increasingly weighing on companies. On Thursday morning
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the official data body revealed that there were 25,000 fewer people on the payroll in May compared
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to the month before and 81,000 fewer compared to a year before. Provisional estimates also show a
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further contraction in June with a decrease of 41,000 on the month. That has pushed the unemployment
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rate up to its highest level in four years. And at the same time, the Office for National Statistics
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said 14 out of 18 industry sectors posted a decrease in job vacancies. It means job postings
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have fallen as companies have curbed hiring plans for the 36th consecutive period. Britons looking
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for jobs or now entering the jobs market might be wondering how on earth we got here. The growth
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rate in payroll data has been fading for nearly three years and it slipped into negative territory
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a few months ago. An economist widely blamed Chancellor Rachel Rees's Ā£20 billion tax rate
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on employers. Her last autumn budget meant businesses saw costs spiral for every new
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employee they hired. Firms now have to contribute more national insurance for higher portions of
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salaries Retail jobs have crumbled as executives at top hospitality companies have reported some 69 job losses since the autumn budget Independent surveys have also
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pointed to the chat GBT effect. The employment platform, Adzuna, said job postings had dropped by nearly a third since its introduction
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Matthew Elliott, the former political strategist who is now president of the
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Jobs Foundation, labelled new data as a jobs recession. Treasury officials might
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be slightly unnerved by the new data published on Thursday morning. But the next big policy decision
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will actually come from the Bank of England next month when it decides on what to do with interest
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rates. Bank of England Governor Andrew Bailey has warned that a further deterioration in the jobs
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market could force policy makers to vote for more cuts. At the moment it has taken a careful and
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gradual approach to cutting interest rates. That's because it has been worried about high inflation
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The bank has a legal mandate to get inflation down to 2%. It is currently at 3.6%
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posing a challenge to Bank of England rate setters. Fewer jobs could hamper demand and lower prices
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It means the bank's interest rate setters may want to help boost consumer spending and reduce
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saving. So high inflation and a so-called jobs recession on the other hand, that's not the
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the position any policymaker wants to be in. And they will be held responsible if fixes are not
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found. For more news about the job market, head over to cityam.com
