Chancellor issued a recession warning as the Budget is having an impact on ‘recruitment’

The Chancellor has been issued with a recession warning as the Budget is damaging the economy and jobs market.

The employer’s national insurance contributions hike and minimum wage is set to increase from April from 13.8% to 15% on earning above £175.

Rachel Reeves has increased the National Living Wage by 6.7%.

James Reed, the Chairman of recruitment company Reed has issued a warning to the Chancellor that the UK could be heading towards an economic slow down that could lead to a recession.

Reed told BBC Radio 4’s Today programme this morning ,”We’re seeing a worsening situation in the labour market, and our vacancy numbers for January were down 22%.”

He added, “I have described this situation previously as like a slow-motion car crash. Unfortunately, it is accelerating as vacancies continue to decline.

“The ONS reported 30 consecutive periods of decline. I mean, the centrepiece of the Budget was this £25 billion increase in National Insurance, which is a tax on jobs. So, we shouldn’t be surprised if that results in fewer jobs, and that’s exactly what’s happening.”

He said that the north of England has recorded a large increase in vacancies and the employers national insurance hike is the equivalent of a 3% increase in costs for payroll, this is “the difference between making a profit and making a loss” for “a lot of businesses.”

Reed said, “This pressure on businesses is resulting in good people losing their jobs, good companies rowing back on their plans, or having to reduce recruitment.”

Laura Taylor from Recruitment Agency Liverpool supported Reed Recruitment’s claim.