Drop in job vacancies is an economic red flag ahead of the Autumn Budget
The drop in job vacancies is an economic red flag ahead of the Autumn Budget, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a director at the firm, said: “Despite the fall in the unemployment rate to 4.7% in August, significant economic red flags remain ahead of the chancellor, John Healey’s first Autumn Budget. According to the Office of National Statistics (ONS), the number of job vacancies has dropped to below 700,000– a concerning indication of businesses overall confidence and profitability.”
He added: “Smaller employers in particular have reduced their hiring plans in the last quarter. The reduction in vacancies is in part a consequence of the increased employer National Insurance Contributions (NIC) and National Minimum Wage rates that the government introduced in the last two years. Although wider economic issues such as higher fuel prices will also be important factors for these businesses hiring plans.”
Robert said: “However, regardless of the reasons behind the fall in small business vacancies, given the traditional importance of this sector to the overall UK economy, it could be a sign of ‘stormy weathers’ ahead over the coming months. It is imperative that the chancellor uses the Budget to clear these dark economic clouds by showing that the government has a clear, long-term strategy to grow the UK economy and drive productivity.”
He added: “If the chancellor reversed employer NIC rates from 15% back to 13.8% it would give many businesses breathing room to consider opening up more roles – particularly for entry level workers. Although there would be a drop in tax take, in the long term, increasing employment rates and business growth would start to make up the fiscal difference.”