The S&P Global flash UK composite purchasing managers’ index (PMI) is grim reading for Labour as jobs are being cut even though the private sector’s economic activity slightly rose.
Data shows this is now the third month of job losses which is the fastest rates in four years for the private sector.
Inflation, various wars, raw materials the weather is making up the struggling economy, according to some economists.
Businesses are warning there is a weak consumer confidence and corporate budgets are now tighter with more cutbacks on non-essential spending.
Chris Williamson, the chief business economist of S&P Global Market Intelligence accused Labour increasing the minimum wage and national insurance for employers and further regulations within the workplace.
Williamson said, “Businesses are reporting a triple whammy of gloomy news as 2024 comes to a close, with economic growth stalled, employment slumping and inflation back on the rise.
“Economic growth momentum has been lost since the robust expansion seen earlier in the year, as businesses and households have responded negatively to the new Labour government’s downbeat rhetoric and policies.
“Firms are responding to the increase in national insurance contributions and new regulations around staffing with a marked pull-back in hiring, causing employment to fall in December at the fastest rate since the global financial crisis in 2009 if the pandemic is excluded.
“While the December PMI is indicative of the economy more or less stalled in the fourth quarter, the loss of confidence and increased culling of jobs hints at worse to come as we head into the new year.”
Rhys Herbert, senior economist at Lloyds, said, “This month’s data reflects some of the challenges that businesses have faced throughout 2024, including adverse weather conditions and ongoing geopolitical uncertainty.
“Firms will be focusing on finding ways to continue the recovery in early 2025 while remaining nimble to adapt to changeable economic conditions.”
