UK Chancellor Rachel Reeves has proposed a tax increase of £26 billion ($33 billion) on businesses.

Analysis from Bloomberg Economics suggests that this tax hike could result in the loss of around 130,000 jobs. The report indicates that employers may respond to the increase in National Insurance Contributions by reducing their workforce or cutting hours, which could potentially raise the unemployment rate by up to 0.4 percentage points.

Economists caution that this tax burden may force businesses to make difficult decisions regarding employment levels, which could have an impact on the overall labor market. The implications of this tax policy are significant, as firms consider the costs of increased contributions in relation to their operational needs.