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Economic Strain and Business Sentiment in the UK

Recent tax increases in the UK have heightened concerns among employers, particularly small businesses, with many predicting layoffs and diminished hiring due to rising employment costs. Surveys indicate that nearly 90% of employers anticipate that the upcoming payroll tax hike will lead to increased expenses, resulting in 42% of them planning to raise prices and a substantial number intending to reduce their workforce. The Federation of Small Businesses reported a significant decline in confidence amongst its members, reaching its lowest level since the pandemic, particularly within the accommodation and food service sectors. Critics, including the Liberal Democrats, have condemned the tax measures as detrimental to the economy, warning of potential job losses amidst an already fragile economic climate.