Rachel Reeves suffered another huge blow after new jobs data emerged (Image: Getty)
Rachel Reeves was dealt another hammer blow as the economic gloom hanging over the UK and spiralling employment costs hit jobs. Hospitality firms have been “taxed out” from hiring this Summer, triggering “the death of the great British Summer job”, industry chiefs warned.
And Labour’s economic plan faced more criticism after a monthly report on jobs showed a "further steep decline" in people taking permanent roles. The influential report by KPMG and REC showed a reading of 40.0 for permanent placements in the UK in July, up marginally from 39.1 in June.
Article continues belowADVERTISEMENT
DON'T MISS
Powered by
POLL: Should the Bank of England cut interest rates?
Good Morning Britain halted for 'breaking news' - it's crushing blow to Keir Starmer
Rachel Reeves looks to Bank of England for help as unemployment rises and economy stalls
UK 'on the brink' as Rachel Reeves massive mistakes are laid bare in full
Rachel Reeves abandoned as BoE ducks big rate decision - now she's doomed
Rachel Reeves ridiculed Tories 34 times over ￡22bn blackhole - then made one twice as big
Bank of England base rate could plummet to 2.75%
POLL: Should Starmer and Reeves resign as they leave UK economy on the brink?
Iceland blasts Rachel Reeves for making food more expensive for customers
Ten most risky 'AI exposed jobs' listed and those ONLY humans can do - for the moment
Only one man can save Rachel Reeves now - and tomorrow he makes his move
Nationwide Building Society to slash mortgage rates by 0.25%
Keir Starmer refuses to rule out tax hikes after ￡50bn black hole exposed
Rachel Reeves warned against stealth tax raid on pensioners and workers to fill black hole
This Is How Donatella Versace Looks Without MakeupRefinance Gold |
Undo
British standard of living blow: Labour IS to blame says Bank of England
Bank of England slashes interest rates to lowest point for over 2 years
Tom Cruise Steps Out With His Most Beautiful Daughter And Fans Are StunnedBoite A Scoop |
Undo
Bank of England blames bad weather and Rachel Reeves for soaring cost of food
Rachel Reeves has the cheek to say she's fixed the economy - she's smashed it to pieces
She’s 75, She’s 78 – Their Handmade Jewelry Is 80% OffCraft & Chronicle |
Read More
Undo
Rachel Reeves tax raid sees UK jobs hit two-year low
'Almost certain' good news coming today for anyone buying a home
The Chip War’s Next Battleground Is in NevadaCapital Trends |
Learn More
POLL: Should the Bank of England cut interest rates?
Good Morning Britain halted for 'breaking news' - it's crushing blow to Keir Starmer
Rachel Reeves looks to Bank of England for help as unemployment rises and economy stalls
UK 'on the brink' as Rachel Reeves massive mistakes are laid bare in full
Rachel Reeves abandoned as BoE ducks big rate decision - now she's doomed
Rachel Reeves ridiculed Tories 34 times over ￡22bn blackhole - then made one twice as big
Bank of England base rate could plummet to 2.75%
POLL: Should Starmer and Reeves resign as they leave UK economy on the brink?
Iceland blasts Rachel Reeves for making food more expensive for customers
Ten most risky 'AI exposed jobs' listed and those ONLY humans can do - for the moment
Only one man can save Rachel Reeves now - and tomorrow he makes his move
Nationwide Building Society to slash mortgage rates by 0.25%
Keir Starmer refuses to rule out tax hikes after ￡50bn black hole exposed
Rachel Reeves warned against stealth tax raid on pensioners and workers to fill black hole
British standard of living blow: Labour IS to blame says Bank of England
Bank of England slashes interest rates to lowest point for over 2 years
Bank of England blames bad weather and Rachel Reeves for soaring cost of food
Rachel Reeves has the cheek to say she's fixed the economy - she's smashed it to pieces
Rachel Reeves tax raid sees UK jobs hit two-year low
'Almost certain' good news coming today for anyone buying a home
POLL: Should the Bank of England cut interest rates?
Good Morning Britain halted for 'breaking news' - it's crushing blow to Keir Starmer
Rachel Reeves looks to Bank of England for help as unemployment rises and economy stalls
UK 'on the brink' as Rachel Reeves massive mistakes are laid bare in full
Rachel Reeves abandoned as BoE ducks big rate decision - now she's doomed
Rachel Reeves ridiculed Tories 34 times over ￡22bn blackhole - then made one twice as big
Bank of England base rate could plummet to 2.75%
But any figure below 50 represents decline in the job market, with levels over 50 showing growth. The data therefore indicated another month of contraction.
Shadow Chancellor, Mel Stride said: "Hardworking families are paying the price for Labour's economic mismanagement.
"The Chancellor's punishing Jobs Tax and reckless economic choices have crushed business confidence and seen unemployment go up every month.
Sponsored
Dental Implants | Search Ads |
Read More
Here's What a Dental Implant Might Cost You in 2025 (See Price List)
Undo
"Labour promised growth - instead hiring is collapsing, wages are stalling, and families are being forced to tighten their belts.
"Rachel Reeves hasn't learnt her lesson and is now preparing yet more tax rises - taxing your future to pay for her failures.
"We can't afford Labour."
Allen Simpson, Chief Executive of UKHospitality, said: “At this time of year hospitality businesses are usually frantically hiring staff for the busy summer months, as the sector expects to welcome families to their hotels, serve countless ice creams on the beach, fish and chips on the pier, and cold pints in the pub garden.
“Hiring this year has fallen off dramatically, with 22,000 fewer jobs available compared to last year.
“It is sadly reflective of the impact we have seen from increased costs over the past nine months – less employment, fewer opportunities and less growth in the economy.
"Hospitality is taxed out and without Government action, we face seeing the death of the great British summer job.
“That’s not good for the economy, for businesses, or for the people that need this flexible work and income during the summer.
“We need to see action at the Budget to reverse this damage. That starts with fixing NICs, lowering business rates and cutting VAT for hospitality businesses.”
Experts from The National Institute of Economic and Social Research (NIESR) last week revealed the Government is on course to miss its “stability rule”, under which day to day spending must be matched by tax revenues.
Instead, it is forecast to face a budget deficit of ￡41.2billion in 2029-30 – the equivalent of 1.17% of GDP.
This means that if Ms Reeves is to preserve her ￡9.9billion buffer to protect Britain against economic shocks she will have to find ￡51.1billion through higher taxes and lower spending annually by 2029-30.
Rachel Reeves is under pressure to boost growth (Image: Getty)
Mel Stride has condemned Labour's record on the economy (Image: Getty)
And prices are set to soar after the Bank of England predicted inflation will rise to 4%, double the official target.
The rising cost of food means shoppers are already abandoning famous brands in favour of cheaper own-label products in an attempt to save money, the Bank warned.
Tax rises introduced by Chancellor Rachel Reeves have contributed to price hikes according to the Bank of England’s Monetary Policy Committee.
Ms Reeves insisted she has a grip on the economy despite being forced to abandon ￡6.25billion of welfare savings by rebellious Labour MPs and u-turn on her winter fuel payment disaster.
Prime Minister Sir Keir Starmer has opened the door to increasing tax rises this autumn, declining to explicitly rule out breaking Labour’s manifesto pledge not to raise VAT, income tax and corporation tax.
Ms Reeves, in a Sunday newspaper column, claimed the public need to be patient with Labour on the economy.
She warned: “I’m impatient for the change people voted for to be delivered, but I have always known it was never going to happen overnight.”
Jon Holt, group chief executive and UK senior partner at KPMG, said: "The labour market cooled in July as chief execs held back from increasing their recruitment budgets.
"Economic uncertainty, the complexities of AI adoption and global headwinds are all weighing on business planning."
Recruiters frequently said in the survey that weak confidence about the economy and "increases in payroll costs" were factors causing the drop in hiring.
It pointed towards a "steady" jobs market in certain sectors, such as engineering, but flagged a continued drop in hiring in retail and hospitality.
Meanwhile, starting salary inflation slowed for a second month in a row to its lowest level since March 2021.
The data comes after the Bank of England pointed towards slowing wage growth over the coming year while the unemployment rate could tick higher.
DON'T MISS
Powered by
POLL: Should the Bank of England cut interest rates?
Good Morning Britain halted for 'breaking news' - it's crushing blow to Keir Starmer
Rachel Reeves looks to Bank of England for help as unemployment rises and economy stalls
UK 'on the brink' as Rachel Reeves massive mistakes are laid bare in full
Rachel Reeves abandoned as BoE ducks big rate decision - now she's doomed
Rachel Reeves ridiculed Tories 34 times over ￡22bn blackhole - then made one twice as big
Bank of England base rate could plummet to 2.75%
POLL: Should Starmer and Reeves resign as they leave UK economy on the brink?
Iceland blasts Rachel Reeves for making food more expensive for customers
Ten most risky 'AI exposed jobs' listed and those ONLY humans can do - for the moment
Only one man can save Rachel Reeves now - and tomorrow he makes his move
Nationwide Building Society to slash mortgage rates by 0.25%
Keir Starmer refuses to rule out tax hikes after ￡50bn black hole exposed
Rachel Reeves warned against stealth tax raid on pensioners and workers to fill black hole
Lara Green Is Retiring - Her Final Jewelry Pieces Are 80% OffDurham News |
Read More
Undo
British standard of living blow: Labour IS to blame says Bank of England
Bank of England slashes interest rates to lowest point for over 2 years
Jolie-Pitt Family Proudly Stands By Shiloh’s ChangeBridesBlush |
Undo
Bank of England blames bad weather and Rachel Reeves for soaring cost of food
Rachel Reeves has the cheek to say she's fixed the economy - she's smashed it to pieces
Taylor Swift, 35, Takes off Her Makeup and Leaves Us Without Wordslilmariogame |
Undo
Rachel Reeves tax raid sees UK jobs hit two-year low
'Almost certain' good news coming today for anyone buying a home
Secure Your Financial Future with Expert Services Near You!Local Financial Guide |
Learn More
Undo
POLL: Should the Bank of England cut interest rates?
Good Morning Britain halted for 'breaking news' - it's crushing blow to Keir Starmer
Dementia Has Been Linked To a Common Habit. Do You Do It?Memory Health |
Click Here
Undo
Rachel Reeves looks to Bank of England for help as unemployment rises and economy stalls
UK 'on the brink' as Rachel Reeves massive mistakes are laid bare in full
Your Tuesday Quiz: What Do You Actually Need To Lose Weight?Noom |
Go To Quiz
Undo
Rachel Reeves abandoned as BoE ducks big rate decision - now she's doomed
Rachel Reeves ridiculed Tories 34 times over ￡22bn blackhole - then made one twice as big
Emma & Mia Are Retiring — Their Handmade Jewelry Is 80% OffThe Art Journal |
Read More
Undo
Bank of England base rate could plummet to 2.75%
POLL: Should Starmer and Reeves resign as they leave UK economy on the brink?
55-Year-Old Dad Looks Younger After Simple Morning RitualTryForge |
Undo
Iceland blasts Rachel Reeves for making food more expensive for customers
Ten most risky 'AI exposed jobs' listed and those ONLY humans can do - for the moment
Undo
Only one man can save Rachel Reeves now - and tomorrow he makes his move
Nationwide Building Society to slash mortgage rates by 0.25%
Keir Starmer refuses to rule out tax hikes after ￡50bn black hole exposed
Rachel Reeves warned against stealth tax raid on pensioners and workers to fill black hole
British standard of living blow: Labour IS to blame says Bank of England
Bank of England slashes interest rates to lowest point for over 2 years
Bank of England blames bad weather and Rachel Reeves for soaring cost of food
Rachel Reeves has the cheek to say she's fixed the economy - she's smashed it to pieces
Rachel Reeves tax raid sees UK jobs hit two-year low
'Almost certain' good news coming today for anyone buying a home
POLL: Should the Bank of England cut interest rates?
Good Morning Britain halted for 'breaking news' - it's crushing blow to Keir Starmer
Rachel Reeves looks to Bank of England for help as unemployment rises and economy stalls
UK 'on the brink' as Rachel Reeves massive mistakes are laid bare in full
Rachel Reeves abandoned as BoE ducks big rate decision - now she's doomed
Rachel Reeves ridiculed Tories 34 times over ￡22bn blackhole - then made one twice as big
Bank of England base rate could plummet to 2.75%
Kate Shoesmith, REC deputy chief executive, said: "There is a path to jobs market recovery - but it will take co-ordinated action from Government, the Bank of England and businesses to maximise on any potential upswing.
"With starting salaries and temporary pay rising only modestly, it was right to cut interest rates last week.
"More action like this, to stabilise the business cost-base, is what will support growth and boost the jobs market this year."
Read Next
SUBSCRIBEInvalid email
We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy