THE Budget tax raid on businesses has led companies to slash jobs at the fastest rate since the financial crisis, a survey shows.

They are now cutting staff at the highest level since 2009, other than during the pandemic.

As well as trimming headcounts, they are freezing hiring and not replacing voluntary leavers to avoid rising payroll costs.

The closely-watched UK S&P PMI Index data signalled the dramatic scale of the rate of job losses in December and this month.

Chris Williamson, from S&P Global Market Intelligence, said: “The loss of confidence, combined with widespread concerns over higher staff costs associated with the Budget, pushed employment sharply lower.”

It came amid a record 50.2 per cent rise in UK businesses showing signs of “critical” financial distress in the final three months of last year, according to insolvency firm Begbies Traynor.

The S&P survey also indicated more firms would have to raise prices to cover higher costs, with the average prices increasing at the fastest pace for 18 months.

Mr Williamson said: “The rise in price pressures hints that the inflation genie is by no means back in its bottle.”

S&P data also signalled that while growth in the services sector was offsetting a manufacturing dip, businesses were already warning of a drop in new work and subdued demand.

The survey is at odds with Chancellor Rachel Reeves’ attempts to “bang the drum” about the UK’s mission for growth at the World Economic Forum in Davos.

This week, supermarkets Sainsbury’s and Morrisons announced job cuts of 3,000 and 200 respectively.

Both have hit out at Ms Reeves’ unexpected hit on businesses through higher National Insurance charges.