Elected this year, Keir Starmer’s government faces a major challenge. Despite the Prime Minister’s many economic promises, the latest jobs reports reveal a worrying situation for Britain.
200,000 positions eliminated in 2024
According to tax data published by HM Revenue & Customs, 200,000 jobs were lost in 2024. The private sector is down 1% since the end of 2023, while the public sector shows relative, albeit fragile, resilience. As for job offers, the situation is just as alarming: they fell by 12% over the year, with only 500,000 offers available in 2024.
These figures weigh heavily in the decisions of the Bank of England (BoE), which closely monitors the state of the job market. As a result, the BoE has only made two key rate cuts this year and appears reluctant to accelerate the move. This monetary posture complicates the ambitions of the Labor government, already engaged in an economic recovery plan.
Uncertain prospects
The hotel industry is among the most affected sectors, while the public sector, which has temporarily supported employment, is preparing to experience a new wave of cuts with 10,000 fewer positions in the public service. At the same time, planned increases in taxes and the minimum wage are pushing companies to reduce their workforce, suggesting further weakening of the labor market in the months to come.
This situation represents a serious setback for Keir Starmer, who had made economic recovery a priority. The persistence of rising wages, despite an overall slowdown, continues to fuel inflationary pressures, making any rate cut by the BoE all the more complex.
The British Prime Minister thus finds himself in a delicate position, with major obstacles to overcome to confirm the promises made to his voters.
Business
