UK output slumps, employment hits 14-year low in Nov

UK business activity fell sharply in November as employment dropped to its lowest level in 14 years, according to BDO LLP’s latest Business Trends report.

BDO’s Output Index slid 4.08 points to 97.77, its steepest monthly fall since April 2022, when surging energy and commodity prices first began weighing on firms. The reading was also weaker than a year earlier, with subdued consumer confidence and persistently elevated inflation. Instead of the usual seasonal uplift, businesses adopted a cautious stance as they awaited clarity from the Autumn Budget.

Employment conditions deteriorated further, with BDO’s Employment Index falling to 93.53, its lowest reading since April 2011. The broader labour market echoed this weakness: the UK unemployment rate rose to 5 per cent in Q3, payroll employment fell by 32,000 across September and October, and firms delayed hiring decisions due to cost pressures. Although vacancies picked up slightly in November, the report notes this was largely linked to short-term festive recruitment rather than a genuine improvement in labour demand.

With wage pressures and new employment legislation expected in early 2026, labour market conditions are likely to remain strained into the new year as businesses continue to balance rising costs with uncertain demand, BDO said in a release.

“The run up to Christmas is usually a golden time where business booms and revenues are shored up, but so far this year it’s falling flat. With output down and employment the worst we’ve seen since the financial crash, the growth outlook is bleak and there was little in the budget to get things moving. In a running theme, businesses need optimism if they’re to invest, grow and hire. If not, we’ll be stuck in this holding pattern at best well into the new year,” said Scott Knight, head of growth at BDO.

ALCHEMPro News Desk (HU)