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Wages warning issued to workers as firms set to face higher tax costs

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An increase to employer national insurance is 'highly likely' to hit jobs and wages, according to the Government's official forecaster.

Chancellor Rachel Reeves announced her first Budget earlier on Wednesday (October 30). She reiterated Labour's promise not to increase income tax, VAT or national insurance of workers.

But the Chancellor confirmed plans to increase employer national insurance contributions from next April. Analysis from the Office for Budget Responsibility (OBR) suggested that the move is expected to have an indirect impact on jobs and wages.

The OBR assumes firms will 'pass on most but not all of their higher tax costs to employees'. READ MORE: Horrific video shows moment boy, 14, is mauled by vicious dog in Bolton park as police hunt owners David Miles, a member of the OBR, said it expects the tax hike to 'have an impact on the level of wages that firms who are facing higher taxes on employing people will pay'. “It seems highly likely that most of it will feed through in real wages,” he said.

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