Part 4/7:
Shifting focus to the UK economy, recent announcements from firms like AO World have revealed that increased employee social security contributions could burden their financial performance significantly. Investors were informed that tax increases, particularly on National Insurance, may deter international investment in the UK.
Flood noted that such changes could lead to adverse effects, including layoffs, as evidenced by a report from the Confederation of British Industries (CBI). This report indicated that around 50% of members would consider job cuts and two-thirds plan to reduce hiring, potentially leading to a rise in unemployment. Such trends could undermine consumer confidence, establishing a difficult cycle for the UK economy.