As artificial intelligence becomes more mainstream, many people are using it to do things that they would normally hire someone else to do. AI is helping people conduct research, analyze options, and even create artistic works. While this makes certain things easier and more efficient, it means that some people will get reduced work or lose their livelihoods. For governments that have to look at the big picture, this means more unemployment which translates to less tax revenue, with an emphasis on social security funding.
The resulting confusion froze investment and hiring plans. Several business surveys have shown sharp recruitment pullbacks since her first budget in October 2024, when she introduced a £25bn payroll tax as part of £40bn in wider hikes. In contrast, last week's budget focused mainly on raising taxes on consumers, including extending the freeze on income-tax thresholds - a move that will ultimately push one in four workers into the 40% bracket.
