UK labour market cooled rapidly in June, KPMG/REC survey shows
The Recruitment and Employment Confederation trade body and accountants KPMG said their index of staff availability rose to 66.1 from 63.3 in May, the highest reading since November 2020.
Only the pandemic, the global financial crisis of 2008-09 and the immediate aftermath of the Sept. 11 attacks in the United States have resulted in higher readings of slack in the labour market.
REC and KPMG said the latest readings reflected unusually high levels of uncertainty rather than a sudden downturn in Britain's economy.
"Ongoing geopolitical turbulence and the threat of rising costs, alongside the promise of technology efficiencies, mean companies continue to wait and see with their hiring," said Jon Holt, group chief executive at KPMG.
The survey is watched by Bank of England officials who are increasingly relying on unofficial gauges of the labour market because of problems with some official data. The BoE is widely expected to cut interest rates next month.
Starting pay for new recruits and demand for staff cooled, adding to signs that the labour market is losing momentum.
Figures due out from the Office for National Statistics on Thursday are expected to show a similar slowdown in pay growth.
British economic growth contracted unexpectedly in May, according to official data published last week.
While U.S. President Donald Trump remains unpredictable on his approach to trade tariffs, last month's publication of the British government's industrial strategy might increase certainty among companies' hiring plans, Holt said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
38 minutes ago
- Daily Mail
What these five Chinese car brands did before they made cars
By One in 10 cars sold in Britain last month were made in China, latest figures from the Society of Motor Manufacturers and Traders show. In the past week, three car makers hailing from China have announced they will launch in Britain. But this new period of automotive brings a lot to debate - price wars, the threat of cheap EVs, and security issues for starters. And another gripe people have with new Chinese car makers is many aren't actually car makers. Instead, many are tech brands masquerading as car companies. As opposed to legacy European brands like Audi, Mercedes-Benz and Volkswagen, these new Chinese companies don't have automotive histories going back over a hundred years. Instead many of them have technology-based roots or in some cases, even more unusual beginnings. We've dug into the pasts of four of China's automotive powerhouses to get to know them a bit better. And we've looked into a fifth that bucks the technology trend, standing proud as a car maker that has always and only made cars. Geely - from fridge parts to EVs... How it started: Geely's origins have a colder start, as the automotive powerhouse began life as a refrigerator parts manufacturer. In 1986, Eric Li founded Huangyan Refrigerator Parts in Taizhou City in the Zhejiang Province of China. For eight years it made refrigerators, freezers and construction and decorative materials. Then in 1994, Huangyan Huatian Motorcycles Factory was established – the predecessor of Geely and the Geely trademark was registered. It wasn't until 1997 that Geely entered the automotive industry. It wanted to produce affordable cars for those on tight budgets, and in doing so it became China's first privately-owned auto manufacturer. How it's going: In 2002, Geely entered into China's top 10 automakers, and by 2010 was in a position to acquire Volvo. Taking 100 percent of the shares of Volvo Car Corporation from Ford, Geely started its Western expansion and quickly snapped up 51 percent of Lotus in 2017, and 9.69 percent of Daimler AG (Mercedes-Benz owner) in 2018. Thanks to these acquisitions Geely Auto was the first Chinese car brand to sell one million vehicles. In 2024, Geely achieved record-breaking sales of almost 2.2 million vehicles – a 34 percent year-on-year increase. Sales outside China increased 21 percent year-on-year, to almost 1.22 million units. And electrified sales grew over 52 percent to almost 45 percent of aggregate sales. Geely will debut under its own name in Britain with the arrival of its EX5 SUV towards the end of the year. BYD – mobile phone batteries to the world's biggest EV maker How it started: BYD was founded in November 1994 by Wang Chuanfu, a Chinese chemist and entrepreneur. He wanted to compete against expensive Japanese battery manufacturers and become a world leader in energy generation, energy storage and rechargeable batteries. In 1996, BYD began manufacturing lithium-ion batteries for modern day smartphones, just as there was a boom in the devices. Throughout the early 2000s, BYD supplied batteries to Motorola and Nokia - at the time two of the biggest players in the mobile phone industry. In 2003, BYD was in a position to sidestep into the automotive industry, acquiring a small car maker called Xi'an Qinchuan Automobile. Its first combustion car, the F3, arrived in 2005, before releasing the plug-in hybrid F3DM in 2008. Warren Buffet invested 10 percent ($230million) and BYD became famous. BYD really took off when it introduced its lithium-ion Phosphate Blade battery in 2020 which increased space utilization by 50 percent and delivered a range boost also of up to 50 percent. How it's going: BYD began exporting outside China in 2010. By 2024, it reached an annual overseas sales figure of 417,204 units – a 71.86 percent increase on 2023. By 2030, BYD aims to sell half its cars outside its native land. In 2024, BYD sold 4,272,145 vehicles globally, marking a substantial increase from 427,302 in 2020. As of March 2025, BYD's sold 11.6 million EVs to date. Tesla on the other hand – who used to be the biggest EV maker in the world - has sold 7.5 million EVs. China's Geely, the owner of Volvo, Polestar and Lotus, is the third biggest EV manufacturer in the world, and yet has just 1.4 million EVs comparatively. BYD is now the largest electric car maker in the world after dethroning Tesla in 2023. Xpeng – search browsers to AI cars How it started: Xpeng is core of the tech-to-car Chinese movement, as it was founded in 2014 as a smart driving technology company. It wanted to redefine the driving experience and use artificial intelligence to craft its EVs. Why did it have this angle? Because it was created by He Xiaopeng, a self-made tech trailblazer who built UCWeb – China's most popular mobile browser. He sold it in 2014 to Alibaba for $4.3billion before pivoting to automotive after being inspired by Tesla and sustainable transport. In 2017, Xpeng revealed its first model, the Xpeng G3, an electric SUV, with deliveries commencing in 2018. Then in 2020, it launched the P7, which made headlines for its AI driving mode. This year Xpeng officially launched in the UK with the G6 all-electric coupe SUV which costs from £39,990. XPeng says 'it is a technology company at heart' and wants to use technology to transform the future of mobility – from road EVs to ones that fly. In this way it is fully embracing its technology origins, not trying to shy away or downplay them. How it's going: In the first half of 2025, Xpeng delivered 197,189 vehicles, already topping its total deliveries for last year which stood at 190,068 vehicles. It's a year-on-year increase of 279.01 percent and marks the eight consecutive month since November 2024 that Xpeng's deliveries have exceeded 30,000 units. As of June, XPeng has entered over 40 countries and regions globally and has set itself a goal that half of future sales coming from overseas markets. Its cumulative sales to date tally up to 752,957. Xiaomi – the smartphone maker turned EV maker How it's going: In June the U7 went on sale and within three minutes Xiaomi said it received 200,000 pre-orders. The orders required a non-refundable deposit of 5,000 yuan (£509) for the vehicles, which are priced from 253,500 yuan to 329,900 yuan. This is unprecedented new vehicle demand in China, where monthly sales of 10,000 units for a single model are a success in its highly competitive EV market. It outdoes annual deliveries of other electric car makers, and could overtake Tesla's sales in China of 480,000 units. The Xiaomi SU7 Ultra is already the fastest electric production car to have lapped the Nurburgring in just 7m 04.95s. Chery - the Chinese car maker that started by making cars How it started: Chery is in rare company in the Chinese automotive world because it is, and always has been, a car manufacturer. This will make naysayers rejoice. Chery was founded in 1996 by a group of government officials who established the automotive company to reduce poverty in Anhui and drive wider economic development. Engine-manufacturing equipment was bought from Ford in the UK, and tooling from VW's Seat. Factory construction commenced in early 1997, with the first vehicles rolling off the production line towards the end of 1999. Mass production came a year later. How it's going: It became the first passenger car company in China to export complete vehicles and as of 2024 it sold more cars last year than BMW: Chery shifted a whopping 2.6million units in 2024 - a 38.4 percent increase on 2023. It's been China's top exporter of passenger vehicles for 21 consecutive years. By production, it was China's third-largest automotive maker in 2024. Chery has launched two sub-brands in the UK in the last year, Omoda and Jaecoo, which have already gained two percent market share. This is Money exclusively revealed this week that Chery is coming to the UK this summer under its own brand, with two SUVs going on sale soon. The first will be revealed at Goodwood Festival of Speed.
The Independent
40 minutes ago
- The Independent
Why zero-hours contracts could be here to stay in new blow to workers' rights
A proposed crack down on zero-hour contracts in the workplace have suffered a setback today. Flagship plans by the Government to halt zero-hour contracts in the workplace have been scuppered by peers in the House of Lords. The House of Lords backed by 264 to 158, majority 106, a move to change the legal requirement for an employer to offer guaranteed hours to an employee's right to request the arrangement. Peers went on to inflict a further blow on the Labour front bench in supporting by 267 votes to 153, majority 114, a measure to exempt employers from having to make a payment to a worker if a shift was cancelled with at least 48 hours' notice. The defeats came as the Employment Rights Bill, which has already been through the Commons, continued its passage through the upper chamber. The changes made by peers to the draft law paves the way for a parliamentary tussle, known as 'ping-pong', where the legislation is batted between the two Houses until agreement is reached. The proposed workers' rights reforms also introduce new restrictions on 'fire-and-rehire' processes when employees are let go and then re-employed on new contracts with worse pay or conditions. In addition, the Bill strengthens trade unions and gives workers certain 'day one' rights, such as sick pay, paternity leave and the right to request flexible working. Proposing his alternative to the proposed zero-hours provision, Liberal Democrat Lord Goddard of Stockport acknowledged the need to tackle the 'exploitative' use of the practice that left workers in 'precarious employment circumstances'. But he added: 'That said, our amendment reflects that shared objective, while offering a more practical and balanced view. 'The amendment changes legislation from an obligation to offer guaranteed hours to a right to request them. 'Furthermore, it maintains that when a such request is made, the employer must grant it.' He added: 'Our amendment seeks a fair balance, protecting workers from exploitation while preserving the flexibility which is crucial for many industries to function.' But opposing the move, Labour peer Baroness Carberry of Muswell Hill, a former assistant general secretary of the Trades Union Congress, warned: 'I very much fear that it undermines the purpose of the Bill, which is trying to deal with the problem of zero-hours contracts.' She said: 'What the amendment doesn't take account of is the imbalance of power in workplaces and the characteristics of employees who are working on zero-hours contracts.' Arguing those on zero-hours contracts were 'the least empowered workers', Lady Carberry added: 'So the right to request guaranteed hours in those circumstances is not a real right at all. 'And then how many of those workers, vulnerable as they are, might come under pressure not to press for guaranteed hours 'This formulation of the amendment leaves open the path to some of those worst employers to make sure that they don't end up offering guaranteed hours to workers on zero-hours contracts.' However, Tory shadow business minister Lord Sharpe of Epsom said: 'It makes no sense to require employers to offer guaranteed hours to employees who don't want them. 'The Government appears to misunderstand or simply disregard the autonomy of the individual worker. 'Imposing this administrative burden, especially on small employers, to calculate and offer guaranteed hours where they are neither wanted nor needed, is an unnecessary and unavoidable cost. 'We therefore strongly support the right to request amendment proposed by Lord Goddard which better respects worker choice and employer flexibility.' Responding, business minister Baroness Jones of Whitchurch said: 'We believe the duty to make a guaranteed offer should lie with the employer. 'This is the best way to ensure that all qualifying workers benefit from the right guaranteed hours when they want them. 'If a worker on an exploitative zero-hours contract had to request the guaranteed outcome, they may feel less able to assert their right to those guaranteed hours, and they would lose out as a result. 'It's quite right to highlight the imbalance of power in the workforce for these individuals, and this is particularly true when workers take up a new job.' She added: 'A right to request model could create undesirable barriers, making it especially difficult for vulnerable workers on exploitative zero-hours contracts to access their right to those guaranteed hours, especially as many workers are younger and often in their first job. 'As the Bill is currently drafted after receiving an offer from the employer, qualifying workers will be empowered to make a decision based on their individual circumstances. 'If a worker wants to retain their zero-hours contract, as many will, they can do so by rejecting the offer.'
The Independent
44 minutes ago
- The Independent
Why wouldn't a wealth tax work in Britain?
Not so long ago, when Labour was in opposition and still popular, there was no question of introducing a wealth tax. Yet today, influential figures such as former leader Neil Kinnock and ex-first minister of Wales Eluned Morgan, and some trade unions, are advocating just such a change. More tellingly, ministers simply refuse to rule out a wealth tax as they might have done before. The latest to do so is the transport secretary, Heidi Alexander, who was asked if the topic had come up at last Friday's cabinet away day and enigmatically replied: 'Not directly.' Teased at Prime Minister's Questions on the subject, even Keir Starmer couldn't bring himself to issue a flat denial. Some wonder if a wealth tax could actually happen... What did Labour promise? There's nothing in the manifesto to rule out a wealth tax, but in an interview in August 2023, Rachel Reeves was unequivocal: 'We have no plans for a wealth tax. We don't have any plans to increase taxes outside of what we've said. I don't see the way to prosperity as being through taxation. I want to grow the economy,' she said, adding: 'We won't be doing that. It's a denial.' And as recently as her spring statement in April, she declared: 'We're not interested in a wealth tax. Our priority is to grow the economy, and that's the way that you make working people better off and secure better public finances.' What does the left want? It's usually stated as a 2 per cent levy on assets – property, shares, art etc – owned by individuals in excess of £10m. For example, someone worth £12m would pay a levy of 2 per cent of £2m – a bill of £40,000. It could be paid immediately, or deferred to disposal (or death). Figures such as Richard Burgon, a left-wing MP who believes in it, says it would raise 'up to' £24bn. What does the chancellor say? As little as possible at the moment, suspiciously sticking to the 'working people' line (though some working people are worth £10m, and more). No denials, then. What are the arguments for a wealth tax? It's said that the country shouldn't balance the books on the backs of the most vulnerable, and that fairness demands that those with the broadest shoulders bear the greatest burden. Recent controversies about disability benefits and children with special needs have heightened the arguments. It's also true that wealth in the UK is undertaxed compared with income, and that we live in an unequal society, at least by some European standards. Economists warn about what might happen as wealth accumulates through inheritance over the very long run. As Thomas Piketty puts it: 'Inheritance will eventually matter a lot pretty much everywhere – as it did in ancient societies. Past wealth will tend to dominate new wealth, and successors will tend to dominate labour earners.' The present debate about 'intergenerational fairness' is one artefact of this phenomenon. And against a wealth tax? It has been tried, and failed. Comparable nations such as France, Germany, Switzerland and Norway have more or less abandoned wealth taxes, or found them to be unproductive. Almost half a century ago, a previous British Labour government issued a green paper on a proposed wealth tax, but then the chancellor, Denis Healey, concluded it would be impractical and too costly to administer. The wealthy have always found ways to avoid such taxes and protect their assets, while the super-rich simply skip the country altogether. Tax expert Dan Neidle judges: 'The idea that we can do something different is naive. It's arrogant to think that we in the UK can achieve a holy grail everyone else has been too stupid to find.' What wealth could be taxed? An uncomfortable truth is that the easiest wealth to tax would be the most politically difficult – and arguably, the least fair: homes and pension pots belonging to individuals worth far less than £10m, and who would fall into the category of 'working people' that Labour has pledged to look after. After all, you can't take the house in which you live and move it overseas. And many of the assets in question will have been taxed already. Any government that tried to tax a capital gain on a principal private residence would place itself in opposition for a generation. What are the practical problems with a wealth tax? Imagine obliging everyone to declare an accurate value for the property (and everything else) they own, along with how much they paid for it, or when it was inherited and its value at the time, and then employing HMRC officials to undertake checks and audits on such a mass of information. Should theoretical, unrealised gains be index-linked to allow for inflation? Any allowance for, say, renovating a derelict building? What counts and what doesn't? Wedding rings? A classic car? The family business? And how about offsetting capital losses on bad investments or failing companies? It would take years to process. What could Reeves have her eye on? It could be large, uncrystallised capital gains on assets such as rental properties, bonds, pension pots and shares at death, which mostly escape inheritance tax (IHT). It would basically be an extension of inheritance tax, itself a deeply unpopular levy (albeit few pay, and the thresholds are generous). Anything else? Capital gains on virtually anything except a main home are already taxed, as are pension pots in certain circumstances, and there isn't that much room left to hike these tax rates. Stamp duty on mansions has already been increased substantially, and of course 'non-dom' status was abolished by the previous government. The 'family farm tax' – the removal of the IHT exemption for agricultural property – is another recent, and unwelcome, change for many. They've even specifically taxed private jets. Beyond a certain level, heavy disincentives to save and invest start to kick in, which would be bad for the economy. For example, Neidle shows how this can depress investment: 'A 2 per cent wealth tax doesn't sound like much, but for someone earning an 8 per cent return on their assets, that plus existing dividend tax creates an effective rate of 60 per cent – and on a year when assets decline, an effective rate of over 100 per cent. That creates an incentive to avoid the tax out of all proportion.' Tax rates set too high on savings mean that people are unduly encouraged to consume rather than make provision for their old age or any periods of unemployment, with dire long-term effects on the Exchequer and on economic growth. It might therefore not raise much revenue for long. Politically, it makes a government look desperate, as if it's constantly looking for new things to tax rather than getting the economy to grow.
