UK employers are bracing for the largest potential wave of layoffs in a decade, driven by declining business confidence and impending tax increases, as highlighted by Chancellor Rachel Reeves in her autumn budget.

Concerns regarding the upcoming employment rights bill are widespread among small business owners, with 90% expressing apprehension about its implementation, contributing to the overall low confidence levels.

The British Beer and Pub Association (BBPA) reported the closure of six pubs each week in 2024, leading to approximately 4,500 job losses, and cautioned that the October budget will impose an additional £650 million in costs on the sector.

CIPD chief executive Peter Cheese noted that employer sentiment has experienced the most significant decline in a decade, prompting plans for reduced headcounts, price increases, and cuts in workforce training investments.

Inflation is projected to rise to 2.8% in January 2025, while the unemployment rate is expected to climb to 4.5% by December 2024, further exacerbating economic concerns.

Small businesses are more worried about tax increases than weak consumer demand, with half of them anticipating revenue declines in the first quarter of 2025.

The CIPD survey revealed that rising national insurance contributions and a 6.7% increase in the national living wage are significant factors influencing employers' considerations of layoffs.

A recent survey from the Federation of Small Businesses (FSB) revealed a dramatic drop in confidence among small firms, with the index plummeting from -24.4 to -64.5 points, particularly affecting the accommodation and food services sectors, which reported the lowest confidence at -111.0 points.

Chancellor Rachel Reeves faces mounting pressure following weak economic data, despite Britain narrowly avoiding a recession in late 2024, buoyed by unexpected growth in the fourth quarter.

Upcoming economic reports are expected to show rising inflation and unemployment, raising concerns among Labour MPs regarding the government's economic strategy.

The Chartered Institute of Personnel and Development (CIPD) reported that intentions to make redundancies are at their highest level in ten years, excluding the Covid pandemic, based on a survey of 2,000 employers.

The FSB emphasized that the decline in small business confidence is pervasive across all sectors, with none reporting a positive confidence score, highlighting an urgent need for government intervention to foster growth.