S&P Global PMI shows firms cut staff for a 24th consecutive month, marking the
longest UK employment slump since the early 2000s and exceeding the post-GFC
downturn. Signs of easing: services-sector layoffs fell to a near one-year low,
and official unemployment remains well below post-GFC levels. The readings
complicate the government's position ahead of this month's budget. Energy shocks
and potential AI-related reductions in labor demand could further suppress
hiring. Since the Labor government returned in 2024 and raised payroll taxes
and the minimum wage, firms have been trimming headcount. Tim Moore, head of
economics at S&P Global Market Intelligence, said weak demand and rising
inflation have weakened firms' activity expectations over the year ahead, though
hiring demand has been stronger than expected and appears to have helped the
labor market edge out of the slump in recent months.
