UK Companies Defy Tax Hikes With Plans to Hire, Survey Finds

(Bloomberg) – In despite the chancellor of Exchequer Rachel Reeves’s tax hikes, the majority of companies planning to rent more personnel despite the chances of tax hikes increased to the highest level this month.

Lloyds Business Barometer, more than 80% of the payroll taxes and sharp increases and the minimum wage that came into force in April will have a limited effect on personnel plans. Recruitment intention increased during the fourth month and 62% of the enterprises planned to add workers in the next 12 months.

According to the survey of 1,200 companies in the first two weeks of August, business optimism rose to 54, the highest since November 2015. An indicator of trade expectations has healed to reach the highest levels of the decade.

A more positive appearance was accompanied by an increase in the ratio of companies that want to increase prices and cause inflation. One out of almost four people expects to increase wages by 4%, which shows that companies exceed higher employment costs to their customers rather than workers.

The figures provide support for Reeves, which is criticized for strangling growth and increasing inflation, especially in food prices. In April, companies faced a £ 26 billion ($ 35 billion) in payroll taxes and an increase in the minimum wage close to 7%, and more tax hikes are expected in the autumn budget due to chancellor wars.

However, while discussing the speed of future interest rate cuts, the findings are likely to increase the concerns of permanent price pressures among the British Bank policy makers.

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Businesses plan to respond to the future increase in employment costs with more price increase, and survey data from the National Statistics Office are shown on Friday. Approximately 28% of the companies, more than other answers, higher prices will cost consumers, he said. Almost a quarter of one -quarter planned to absorb the hit through profit margins, and only 10% said they would reduce the number of staff.

“This is a modest guarantee against the wider British economy,“ This is, the ongoing tendency to work in business, and that British companies have remained optimistic about their trade expectations, L “Wage expectations have seen a remarkable change this month, but it is seen whether this is a continuous tendency or a temporary increase or a temporary rise.”

Lloyds said that despite the decrease in economic optimism, it is higher. Approximately 35% of the employers will increase by 4% or more than one month ago. The share of companies planning to receive prices next year increased to 67% in August, while only 2% are waiting for price decreases.

-With the help of Tom Rees.

(Adds an ounce survey on response to future employment cost increases)

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