In the News

In the News Teaching Activity – Christmas does not lift the spirits of businesses (Dec 2024)

Elizabeth Veal

16th December 2024

As job vacancies drop at the fastest rate since the pandemic, businesses are gloomy as they look ahead to 2025.

Business confidence in the UK has plummeted to its lowest level in nearly two years, driven by increased costs, sluggish consumer demand and uncertainty following October’s budget. Reports from KPMG, REC, and BDO reveal a sharp contraction in job vacancies, particularly for permanent roles, marking the 13th consecutive month of decline. Employers are grappling with higher taxes and rising employee costs, including the upcoming hike in employers' national insurance contributions and minimum wage. These pressures have dampened investment and hiring across key sectors, signalling growing challenges for economic growth at the end of 2024 despite hope for strong Christmas trading.

UK job vacancies fall at fastest rate since pandemic as business confidence slumps | Economics | The Guardian

1. What do the recent trends in UK job vacancies reveal about the state of the labour market and economic activity?

2. Discuss the key factors impacting UK business confidence, including those highlighted in the article.

3. How might Andrew Bailey's indication of potential interest rate cuts in 2025 influence business confidence and their willingness to invest in the near term?

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Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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