UK Firms Warn of £1.1 Billion Labour Cost Surge Following Budget Changes

British companies are preparing for a hefty blow to their financials in the wake of the latest budget as they expect to incur more than 1.1 billion pounds of additional labor costs due to increased employers’ social security contributions and minimum wage rises, according to Reuters. Numerous industries including retail and distribution expect significant incremental costs which may lead to inflation.

According to the data, there is an increased operational cost for retail giants. Sainsbury’s, which has a workforce of about 150,000 people, will be affected by new national insurance shifts of 140 million pounds. M&S expects 60 million pounds from the rise in national insurance and another 60 million from the 6.7% increase in minimum wage. Asda says it expects that the changes will be “probably inflationary to some extent.”

This is not only a problem in the retail sector, other sectors are also expressing a lip experience on the costs front. IDS, the parent company of Royal Mail says it will spending about 120 million pounds annually while BT estimate their spending to nearly 100 million pounds. Public group such as Mitchells & Butlers and JD Wetherspoon have warned of £23m and £60m respectively annually.