The UK’s non-public sectors culled jobs for the seventeenth consecutive month in February led by a big drop within the companies sector as companies have been nonetheless digesting the impression of Labour’s 2024 Autumn Funds.
The newest flash Buying Managers Index (PMI) from S&P World described the speed of job shedding in February as at a “stable tempo” however “fractionally slower” than the decline in January 2026.
However the companies sector was highlighted for a “notably sharp drop” in payroll numbers in comparison with that in manufacturing, which additionally suffered a loss.
This got here because the headline studying for the PMI nudged as much as 53.9 from 53.7 final month – stretching additional above the 50.0 threshold which signifies development. The determine additionally signalled the quickest rise in non-public sector exercise since April 2024.
“Regardless of having fun with increased demand for items and companies, firms stay targeted on boosting productiveness to chop prices, leading to yet one more month of steep job losses to lengthen the continuous jobs downturn that was initiated by the 2024 Autumn Funds,” mentioned Chris Williamson, chief enterprise economist at S&P World Market Intelligence.
Common price burdens for personal sector companies have been reported to have elevated “sharply” in February. Since Chancellor Rachel Reeves’ first Funds – the place she hiked employers’ nationwide insurance coverage contributions 1.2 per cent – companies throughout the board have pointed to a dampened urge for food for hiring as prices swelled.
Wage pressures hit jobs market
S&P additionally reported the speed of value inflation eased to a three-month low however was nonetheless recorded at above the survey common.
“This was largely on account of one other steep improve in enterprise bills throughout the service financial system, which survey respondents largely attributed to elevated wage pressures,” the report mentioned.
Strain has piled on the federal government over steady will increase to the minimal wage as unemployment continues to surge.
The Financial institution of England’s Catherine Mann has mentioned the rise in youth unemployment mirrored “disproportionately massive will increase within the minimal wage for that age group”.
Simply north of 16 per cent of individuals aged 16 to 24 have been registered as unemployed in comparison with the nationwide common of simply over 5 per cent, in new information this week. Within the remaining quarter of 2025, joblessness amongst younger folks soared to 740,000 hitting an 11-year excessive.
The figures ramped up scrutiny on Labour’s manifesto promise forward of the 2024 Normal Election to ditch “discretionary age bands”.
On Wednesday, Reeves prevented instantly answering whether or not the federal government would drop or delay the pledge amid rising unemployment, particularly in youthful generations.
Sir Keir Starmer later confirmed the pledge would stay, saying: “We’ve made commitments to younger folks in our manifesto, and we are going to hold to these commitments, together with the dedication that we’d ensure that the dwelling wage would go up this April, which I can completely affirm to you’ll occur.”
