Beleaguered services sector axes jobs for fifteenth month in a row as Labour’s tax rises
Britain’s dominant services sector slashed jobs for the 15th month in a row in December as Labour’s tax rises and minimum wage increase hit employers, according to a report.
The closely-watched purchasing managers’ index (PMI) survey also revealed that growth remained ‘lacklustre’ amid ‘weak UK economic prospects’.
Services, ranging from bars and hotels to law and accounting firms, represent four-fifths of economic output. The PMI showed job cuts continued at a ‘solid’ pace amid ‘elevated pay pressures and squeezed margins’.
It came after a steep rise in the minimum wage as well as a £25billion increase in employer national insurance, which has made hiring more expensive.
The reading for the sector of 51.4 – where 50 separates growth from contraction – was lower than expected and only slightly up from 51.3 in November.
Matt Swannell at the EY Item Club said: ‘While little signal can be taken from the month-to-month moves in the PMI, it will likely be difficult for the UK economy to gain momentum over the course of this year.’
Squeezed: Services, ranging from bars and hotels to law and accounting firms, represent four-fifths of economic output
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Freetrade
Freetrade
Investing Isa now free on basic plan
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.