UK companies cut staff at fastest pace in two years in June — KPMG

Data compiled by KPMG and the Recruitment and Employment Confederation (REC) shows that British companies reduced their workforce in June at the sharpest rate in two years. The decline suggests that the tax hikes on employers continue to weigh on the labor market.

As Bloomberg notes, UK Chancellor of the Exchequer Rachel Reeves raised employers' national insurance contributions by 26 billion pounds sterling ($35.05 billion). The measure, implemented in April, has further dampened labor demand.

Since October, the UK workforce has shrunk by nearly 250,000. REC Chief Executive Neil Carberry highlighted that labor market volatility has been rising month after month.

The Bank of England should not overlook this weakening labor demand when considering interest rate cuts, the agency said. Currently, traders estimate an over 80% chance of a quarter-point rate reduction at the next meeting.