Employer national insurance raid could lead to 130,000 jobs being slashed

The government’s hike to employers’ national insurance could cost as many as 130,000 jobs, according to new research.

Analysis from Bloomberg Economics suggests that up to 130,000 jobs could be lost if firms responded to the tax hike primarily by cutting employment.

This would amount to a 0.4 percentage point increase in unemployment, and would likely encourage the Bank of England to cut interest rates faster than markets anticipate.

The analysts did not think this was the most likely outcome, suggesting that the cost of higher taxes would likely be distributed more evenly across wages, margins and prices.