Stay informed with free updates

Just sign up to UK job myFT Digest — delivered directly to your inbox.

UK employers cut staff numbers after the Labor government’s tax hike budget even as wage growth accelerated, official data showed on Tuesday.

Paid employment fell by 0.1 percent between October and November and was 11,000 fewer in the three months to November than in the previous quarter, according to figures from the Office for National Statistics.

Early estimates for December suggested a larger month-on-month drop of 47,000 to 30.3mn in the payrolled workforce.

At the same time, average weekly earnings in the three months to November were 5.6 per cent higher than a year earlier, including and excluding bonuses, the ONS said. Economists had expected 5.2 percent.

The figures come as evidence mounts that economic growth has weakened following Rachel Reeves’ October Budget, in which businesses bore the brunt of £40bn in tax rises.

The rise in employers’ national insurance contributions and the increase in the minimum wage have combined to leave some sectors facing a sharp jump in costs when the measures come into force in April.

Surveys suggest that businesses will try to offset higher costs by cutting jobs, squeezing wages or passing them on to consumers through higher prices.

Last week’s figures showed UK GDP grew by a measly 0.1 percent in November, undercutting economists’ forecasts, after mild contractions in September and October.

The ONS survey-based employment measure also showed the jobless rate rose to 4.4 per cent in the three months to November, from 4.3 per cent previously, although this measure has recently been less reliable.