Job seekers surge as hiring stalls

The number of jobseekers in the UK is rising at its fastest rate since November 2020, according to a report by the Recruitment and Employment Confederation (REC) and KPMG. The surge comes as firms face economic challenges, including weak economic growth, rising unemployment and higher inflation. It is noted that businesses have come under pressure from increases in employer National Insurance contributions and the minimum wage. Jon Holt, chief executive and senior partner at KPMG in the UK, said: “It’s unlikely we’ll see a significant shift in recruitment patterns in the near term as businesses evaluate their investment strategies in response to policy commitments and the rapid pace of change brought by AI and new technologies.” Neil Carberry, chief executive of the REC, commented: “All eyes are now on the Autumn Budget, in hope that the Chancellor won’t do any further damage to the labour market with costs on hiring.” He added: “For the economy to thrive, the Budget must recognise the need for investment in people.”

Unions call for workers’ rights commitment

Unions are urging the Government not to water down the Employment Rights Bill, despite a reshuffle that has seen ministers who spearheaded calls for enhanced workers’ rights leave their positions. Unions have voiced concern after Angela Rayner resigned as Deputy Prime Minister and Justin Madders was removed as Employment Rights Minister, with Unite general secretary Sharon Graham saying that removing ministers who have worked with unions on the Bill “signals a move in the wrong direction.” Paul Nowak, general secretary of the TUC, said that while the Conservatives and Lib Dems “are desperately trying to water this Bill down,” Labour must stand firm and deliver legislation that will “level the playing field.” TUC analysis shows that 4m people in the UK are in insecure work, including those on zero-hours contracts, agency workers and low-paid self-employed workers who miss out on key rights and protections. The Federation of Small Businesses (FSB), meanwhile, says the Government reshuffle presents an opportunity to “fix the issues” with the Bill. Noting that 92% of employers it polled said they were worried about the legislation, the FSB said firms are “overwhelmed by the changes that are coming.”

Pay growth hits four-year low

Pay growth in the UK has fallen to its lowest level in nearly four years, according to Incomes Data Research, dropping from 3.4% to 3% in the three months to July. This marks the slowest pace since December 2021 and the decline is attributed to an increase in worker availability and a slowdown in hiring. The report indicates that higher-paid sectors experienced the most significant reductions in wage growth. The wage settlement data covers pay awards at large employers covering more than 680,000 workers, with these mainly in the private sector.

HMRC failing to answer millions of calls

HMRC has revealed that more than 3m calls to its helpline go unanswered each year, frustrating small business owners who struggle with complex tax regulations. Jonathan Athow, HMRC ‘s director general of customer strategy and tax design, told MPs that the tax office aims to answer 85% of calls and is “pretty close to those levels,” with it currently managing to pick up about 83%. He noted that limits to HMRC’s funding mean it is unable to answer every call. Asked how many calls went unanswered, Mr Athow told the committee: “At the top of my head, we’re talking maybe three or four million calls potentially.” Liam Byrne, Labour Chair of the House of Commons Business Committee, said: “Three to four million calls lost each year is not just inefficiency. It is tantamount to indifference.” Tina McKenzie, policy chair at the Federation of Small Businesses, commented: “Dealing with HMRC can be a major source of headaches for small businesses, with less than a quarter of those who had contacted HMRC by phone over the previous two years rating their experience as good.” Analysis shows that HMRC fails to collect around £46.8bn every year.

PwC boss calls for consistent policy

Marco Amitrano, head of PwC UK, says the Government’s industrial strategy is “a welcome step” which creates “a framework to significantly increase business investment” but argues that “the prioritisation of growth must now run through every area of government policy.” Calling for stability, he says: “Consistent policy signals, credible regulatory reform and a more predictable tax environment are not simply enablers of investment; they are preconditions for job creation.” Mr Amitrano says clients have welcomed efforts to streamline regulation, adding that these “are hopefully the start of more systemic change.” He warns, however, that the tax environment “is more uncertain.” Saying that the UK “needs to be at the forefront of the global market and to strengthen its economic position,” Mr Amitrano calls for “credible cross-industry policies to reduce costs, attract overseas investment and support the skills needed for tomorrow.” Noting that PwC is welcoming fewer graduates this year than in 2024, Mr Amitrano says this reflects broader industry changes, particularly the impact of AI on roles.

M&A activity declines in H1

Merger and acquisition (M&A) activity declined in the first half of the year, with analysis by PwC showing that the total value of UK M&A deals fell 12.3% from £65.3bn to £57.3bn. The number of deals, meanwhile, was down 19.1% to 1,478. The industrials and services sectors led the way, accounting for 400 M&A deals between them. The report also shows that the average deal size in H1 came in at £162.9m. Lucy Stapleton, global head of deals at PwC UK, said the market has been “characterised by a sense of restrained momentum,” adding that while there is “a strong pipeline of deals ready to go … many remain paused due to ongoing volatility.”

Higher taxes will deter US investors, says trade group

The UK risks losing US investor confidence due to increasing tax and regulatory burdens, according to trade association BritishAmerican Business, with a recent survey indicating a significant decline in corporate sentiment.

Tax raid on partnerships could raise £2bn

Chancellor Rachel Reeves is reportedly considering a plan to impose National Insurance (NI) on partnerships, potentially raising nearly £2bn annually. This plan, presented by the Centre for the Analysis of Taxation (Centax), could have an impact on 190,000 professionals, including GPs, lawyers and solicitors, accountants and financial advisers. The report suggests that 98% of the revenue would come from the top 10% of earners. CenTax described the fact that companies pay NI while partnerships do not as “a particularly conspicuous anomaly” in the tax system, adding: “Partnerships face significantly lower effective tax rates on their labour costs than companies, for no good reason.” The report argues: “The tax privilege offered to partnerships results in economic distortions that are bad for productivity and growth.”

Cavendish chief: Tax hikes will hit IPO revival

Julian Morse, co-chief executive of broker Cavendish, has warned that tax hikes could hinder a possible revival in UK stock market flotations. Warning that there remains a “big unknown” over whether the Budget will deliver a tax raid on businesses, he said: “If taxes rise substantially, it will slow or stop growth. Any economy in a high-tax environment doesn’t do well.” Considering the market, Mr Morse said it is “definitely a lot busier on the IPO front than for a long time,” adding: “Because the markets are performing at the moment, people are getting decent returns – that fuels more investment into IPOs.”

Tyrie criticises CMA over inaction

The former chairman of the Competition and Markets Authority (CMA) has criticised the competition watchdog over its slow response to new powers aimed at regulating major tech firms and protecting consumers. Lord Tyrie expressed surprise at the lack of action since the Digital Markets, Competition and Consumers Act took effect, with it found that the CMA has yet to designate any companies with strategic market status, although it is investigating Apple and Google. Lord Tyrie warned that inaction could lead to increased anti-competitive behaviour, saying: “Some action will have a wider deterrent effect against anti-competitive conduct. Failure to take any action risks the reverse.” A spokesman for the CMA said “any suggestion” it had not acted quickly “does not reflect the facts.”

LSE chief: Boosting investment will deliver growth

Dame Julia Hoggett, the chief executive of the London Stock Exchange, has urged ministers to encourage investment in capital markets, saying that doing so will help drive economic growth. With Chancellor Rachel Reeves having outlined plans for a campaign to promote investing, Dame Julia says she hopes this will deliver a “zeitgeist shift” which helps the “flywheel to turn.”

Private equity deals rebound after slow start

Analysis from financial data platform PitchBook shows that the total value for UK private equity deals dropped 5.3% in the first half of the year. However, the number of completed deals was up 19.2% to 1,060, with this coming amid a rebound following a sluggish first quarter. Buy-out deals made up a quarter (25.7%) of the overall total, while also accounting for the majority of deal value for the first time since 2021.

Defence strategy will boost local growth

The Government is set to unveil a new Defence Industrial Strategy (DIS) that will support local economic growth. Ministers say the strategy, which will be backed by £250m in funding, will deliver new opportunities such as highly skilled engineering positions and apprenticeships. Officials say up to 50,000 new defence jobs could be created by 2035, while Chancellor Rachel Reeves said the plan would “unleash the power of local economies while securing our country.” The £250m fund will be used in collaboration between local authorities, businesses, academic institutions and the defence sector. The first Defence Growth deals will be in Scotland, Wales, Northern Ireland, Yorkshire and Plymouth.

Chartered accountants top trust rankings

New research by Edelman DXI for Chartered Accountants Worldwide (CAW) reveals that 87% of senior business and finance decision-makers in Scotland trust chartered accountants, surpassing other professions like doctors and scientists. This marks a 12-point increase since 2023, with the Institute of Chartered Accountants of Scotland noting a rise in trust from 74% to 84%. Ainslie van Onselen, chair of CAW, commented: “Trust is becoming more fragile across institutions, but this data confirms that chartered accountants continue to buck the trend.”