UK businesses shed jobs over the past two months at one of the quickest rates since 2009, when the UK economy was in the grip of the fallout from the financial crisis and the credit crunch, a closely watched survey showed.

Optimism among companies also fell to the lowest level since late 2022, shortly after the Liz Truss mini-budget unsettled financial markets, according to the flash S&P composite purchasing managers’ index (PMI) for January.

Businesses have in part frozen hiring plans and sacked workers in response to Rachel Reeves’s tax-raising budget in October.

Businesses had warned that the increased costs would result in job losses and higher prices for consumers. The chancellor increased the employers’ national insurance contributions (NICs) to 15 per cent from 13.8