Market News
UK factories cut staff at fastest pace since 2020 but optimism rises, PMI shows - REUTERS
LONDON, March 3 (Reuters) - British factories cut staff at the fastest pace in nearly five years last month as the government's payroll tax increase began to push up their costs and demand at home and abroad was weak, a survey showed on Monday. But manufacturers also turned the most positive in six months as they hoped for a pick-up in the economy. The S&P Global Purchasing Managers' Index for UK manufacturing remained below the 50.0 threshold that divides growth from contraction for a fifth month in a row, sinking to a 14-month low of 46.9 in February.
That was above a preliminary estimate for February of 46.4 but below January's 48.3. The PMI's jobs measure fell to its lowest since May 2020 - early in the COVID-19 pandemic - with factories responding to a rise in their social security contributions bill by laying off temporary staff, reducing the working hours of some employees, making redundancies and not replacing leavers. The rise in National Insurance Contributions - announced by finance minister Rachel Reeves last October to help pay for more public services and investment - takes effect on April 1. That is also the date for a nearly 7% increase in the minimum wage.
