Published by Global Banking & Finance Review®
Posted on October 10, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleUK employers are slowing hiring and pay rises due to concerns over potential tax hikes in the upcoming budget, impacting the job market.
LONDON (Reuters) -Britain's hiring market remains sluggish and pay is stagnating with employers worried about possible further tax increases in finance minister Rachel Reeves' November budget, according to a survey of recruitment firms published on Friday.
The Recruitment and Employment Confederation's data for September showed further sharp falls in hiring although the drop in new permanent staff was the least severe in 12 months.
Vacancies were down, especially in retail and hospitality which have been hit hard by Reeves' decision at her first budget last year to raise social security contributions for employers.
Starting salaries barely rose and those of permanent staff increased by the least since a run of pay growth started in March 2021.
REC Chief Executive Neil Carberry said Reeves could boost corporate confidence in her November 26 budget by avoiding fresh tax rises for business and showing flexibility on a plan to give workers more right that employers fear will add to their costs.
"A genuinely pro-business, pro-growth Autumn budget next month could provide much-needed relief," he said.
Reeves is widely expected to increase taxes to keep the public finances on track to meet her fiscal targets.
(Writing by William Schomberg)
A pay rise, also known as a salary increase, is an adjustment to an employee's compensation, typically reflecting their performance, inflation, or changes in job responsibilities. It is often seen as a reward for good work.
Corporate confidence is the level of optimism or pessimism that businesses feel about the economic environment and their future prospects. It can influence investment decisions and hiring practices.
A budget in finance is a plan that outlines expected revenues and expenditures over a specific period. It helps organizations manage their resources effectively and make informed financial decisions.
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