UK to witness increased inflation, slow pay growth and job cuts

Britain’s top retailers have urged Finance Minister Rachel Reeves to reconsider the Labour government’s October 30 budget, warning it will inevitably lead to higher prices, job losses, and reduced investment. In a letter organized by the British Retail Consortium and signed by 79 industry leaders, including executives from Tesco, Marks & Spencer, Sainsbury’s, and Amazon UK, they requested a meeting to address their concerns and propose solutions.

The budget includes a 1.2 percentage point increase in employers’ National Insurance contributions to 15%, a reduction in the earnings threshold for payments from £9,100 to £5,000, and a 6.7% rise in the minimum wage for adults, all set to take effect in April.

The retailers highlighted the compounding impact of these changes, alongside new packaging levies and higher business rates, estimating an additional £7 billion ($8.8 billion) in annual costs by 2025. They warned that such pressures would lead to inflation, slower wage growth, shop closures, and job cuts, particularly for entry-level positions.

The group is urging the government to phase in the lower earnings threshold, delay packaging levies, and accelerate reforms to business rates. Despite the concerns, Prime Minister Keir Starmer defended the budget, stating on Saturday that he stands by its decisions “all day long.”