“This was always going to be a tough month for British employers who have been preparing for cost increases via national insurance and the living wage rises. The latest data gives the impression everything is more or less on an even keel but we know that's not the case and need to take these official numbers with a pinch of salt. The overall employment landscape is undergoing a seismic shift. We’re seeing much broader scale cutbacks than we’d previously anticipated as higher costs coincide with the Trump-led tariffs and British Steel negotiations, all adding to a greater sense of uncertainty for businesses.
“Because the ONS labour market data is also a lagging indicator the impact of these combined factors won’t be fully understood until later in the year – and even then caution will be necessary as work continues to improve the data because of poor response rates to the Labour Force Survey. We anticipate in the meantime that decisions around both hiring and pay will be put on ice until a clearer path to growth and productivity is evident.
“For the time being, employers can bucket these major changes into two distinct categories; those we know for certain, such as the Employment Rights Bill and Welfare Reforms, and those that are much less predictable such as the Tariff changes and impacts. The next few weeks will need teams to be nimble, adaptable and quick to respond; businesses that can should invest their time and efforts into training, upskilling and internal mobility, to stay resilient and prepare for new challenges ahead.”
