Busi­nesses cut jobs at the quick­est rate for four years this sum­mer and repor­ted the worst employ­ment out­look since the pan­demic, point­ing to the impact of chan­cel­lor Rachel Reeves’ decision to raise payroll taxes.

Com­pan­ies reduced employ­ment by an annual rate of 0.5 per cent in the three months to August, the worst fig­ure since 2021, accord­ing to a Bank of Eng­land sur­vey of chief fin­an­cial officers pub­lished yes­ter­day. Last month, busi­nesses also told the cent­ral bank they expec­ted to cut employ­ment by 0.5 per cent in the year ahead. This is the worst read­ing since Octo­ber 2020, when the eco­nomy was start­ing to recover from Covid-19 and some restric­tions were still in place.

Busi­nesses have blamed tax increases in Reeves’ first Budget last Octo­ber for the pull­back in hir­ing, which has been repor­ted in a string of other sur­veys.

A £25bn increase in national insur­ance con­tri­bu­tions, announced in the fiscal event, took effect in April along with a rise in the min­imum wage.