Business news 10 November 2022
James Salmon, Operations Director.
Private sector hiring falls for first time since 2020. Mental health epidemic fueling staff shortages. Poor health of public holding back UK growth. Government failing London SMEs. And more business news.
Private sector hiring falls for first time since 2020
The latest survey of recruitment firms for KPMG and the Recruitment and Employment Confederation shows private sector hiring slowed last month for the first time since 2020. The fall in permanent placements in October comes as overall growth in vacancies slows despite high demand for workers.
Starting salaries also grew at the slowest rate in 18 months as wage growth slowed.
Claire Warnes, a partner at KPMG, said: “The looming recession is clearly impacting the UK jobs market. Employers’ caution in hiring, combined with fewer available candidates, has resulted in the number of permanent placements falling.”
REC CEO Neil Carberry commented: “The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year. We will need to watch how this story develops over months to come, but so far this data suggests heightened employer caution, not a retreat from the market.”
Mental health epidemic fueling staff shortages
Long-term sickness and mental health conditions are driving a rise in the number of people neither working nor seeking work to almost 9m. Levels of economic inactivity among the long-term sick jumped by 537,500 between the year to June 2019 and the year to June 2022, figures from the Office of National Statistics show. Around 454,300 can be attributed to mental health conditions, such as depression, stress and anxiety orders.
Sky News notes a recent report by Deloitte which found the annual costs to UK employers of poor mental health have increased by 25% since the start of the pandemic.
Poor health of public holding back UK growth – Haldane
Economic growth is being held back by the deteriorating health of the British public, former chief economist at the Bank of England Andy Haldane has warned. “We’re in a situation for the first time, probably since the Industrial Revolution, where health and wellbeing are in retreat,” he said. “Having been an accelerator of wellbeing for the last 200 years, health is now serving as a brake in the rise of growth and wellbeing of our citizens.” He said the pandemic was a tipping point for a health service that has seen one of the lowest rates of investment in the G7. Citing a record number of unfilled vacancies, Mr Haldane proclaimed: “We haven’t got enough people.”
Government failing London SMEs
New figures show just a quarter of London SMEs have been successful in their bid to win a government contract. The figures, from the Federation of Small Businesses (FSB), also show the Government has not met its target of awarding one-in-three public contracts to SMEs by 2022.
FSB policy chair Tina McKenzie said the UK’s procurement process needed to be “more streamlined and transparent” to help smaller companies apply. “The proportion of small businesses winning public sector contracts is way below the Government’s one in three target, and more must be done so innovative and ambitious small firms are not excluded by unrealistic and unnecessary contract terms,” she said.
Chancellor to reduce threshold for 45p tax rate
Jeremy Hunt is expected to lower the threshold at which people pay the highest rate of income tax from £150,000. A Treasury source said there was an option to raise the headline rate of tax but a “significant lowering” of the threshold for the highest earners would be more likely. Rishi Sunak has reportedly ruled out raising the 45p rate to 50p after acknowledging it would be an unacceptable breach of the Tory party’s manifesto promise.
Rising asset wealth and falling real wages ‘drive inequality in Britain’
New research suggests working for a living has become a harder way to grow rich in modern Britain amid rising wealth inequality over the past decade. The Institute for Fiscal Studies said wealth had grown rapidly compared with earnings from work since the 2008 financial crisis, driven by a surge in house prices and financial assets – such as stocks and shares – at a time of flatlining progress for average wages. Robert Joyce, the deputy director of the IFS, said: “A generation of Britons has ridden a wave of growing asset prices, pushing up the value of their houses and investments. Meanwhile, more than a decade of stagnant earnings has held back younger generations for whom earning their own economic success has become increasingly difficult.”
Brexit
Prime Minister Rishi Sunak and his Irish counterpart Micheal Martin will hold talks today,in a sign the UK government is trying to bring an end to the war with the European Union over Brexit and the Northern Ireland protocol. Insiders say a deal is doable by the end of the year.
Strikes
Londoners faced chaos this morning as tube strikes hit the capital.
Nurses
Yesterday the Royal College of Nursing announced that its 300,000 members had voted for the union’s first ever national strike.
Meta/Facebook
Meta announced it is going to sack 11,000 staff or 13% of its workforce.
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