UK cost of living squeeze tightens as mortgage rates rise ; JLR announces 4,000 job cuts – business live

Time to wrap up:

Jaguar Land Rover has announced thousands of job cuts in a “body blow for workers†as it grapples with tough trading conditions, Donald Trump's tariff wars and the fallout from a cyber-attack.

Britain's largest carmaker, which is owned by the Indian conglomerate Tata, confirmed the anticipated cuts on Monday, saying it wants to reduce its global workforce by about 4,000 over two years, as part of an effort to save £1.7bn.

JLR's employs 44,000 people globally and 34,000 in the UK. The cuts will mainly affect the 26,000 UK employees who are salaried and management workers. The company has plants in Solihull, Warwickshire and Merseyside, and is headquartered in Coventry.

Its proposal threatens to provide an early reality check for the new prime minister, Andy Burnham, and his promise to “reindustrialise†Britain.

JLR's profits have tumbled as it wrestles with strong competition in the global car market, Trump's US tariffs and last year's hack, which led to the shutdown of its factories.

The JLR chief executive, PB Balaji, said:

“The automotive industry faces significant challenges, with technological change amidst intense competition and ongoing geopolitical uncertainty. Through our Growth Reimagined strategy, JLR is moving decisively to strengthen our competitiveness and position the business for long-term success.â€

A £500,000 package to suppork workers has been announced…

In another blow to UK households, British wholesale gas prices have hit their highest level since early 2023.

With oil also rising, Eurozone government bond yields have risen today.

UK house prices have fallen for the first time in almost three years, as prospective buyers were squeezed by higher mortgage rates, geopolitical uncertainty and stretched affordability.

Prices have dropped by 0.4% compared with a year ago, the first year-on-year decrease since November 2023, according to the lender Lloyds. That came in below expectations of a 0.2% annual rise, according to a poll of economists by Reuters.

The average property cost £298,468 in August, falling 0.2% or £685 compared with July, the bank's monthly index found.

UK mortgage rates have jumped this morning.

There's no Wall Street trading today, as it's the Labor Day holiday in the US.

The West Midlands Combined Authority (WMCA) says the £500,000 package will targeted support to the JLR workers to fill any gaps in their skill set and match them to potential employers, giving them the best chance of securing a new job.

WMCA staff have already started working with colleagues at the DWP, local authorities, employers and wider partners to coordinate support for affected workers, ensuring access to a range of services tailored to their individual needs such as careers support, skills advice and job matching, they add.

European manufacturing industries staged a “death†protest outside the European Commission's Brussels headquarters today warning of mounting deindustrialisation in the EU in the face of competition from China, my colleagues Lisa O'Carroll and Jennifer Rankin report.

Eurometal, which represents the backbone of manufacturing, brought ten fake coffins to the plaza in front of the Berlaymont building to appeal for urgent action to save jobs and EU businesses.

They predict some 300,000 jobs will be lost in the last four months of this year as European industry deepen their dependency on components and chemicals, used in 90% of manufacturing, from China.

Eurometal, represents European steel distribution, derivatives, and manufacturing sectors and says while Brussels has protected the car and steel industry it has not protected the industry using finished components coming from China and India.

Alexander Julius, the president of Eurometal, told the Guardian:

“China has made no secret of what it is doing. It is in their five-year plan.

“China doesn't want to be a raw material supplier, it wants to be a finished product supply. They want to be in key product supply chains because they know that once they control the supply chain, they own the complete value chain.â€

The Unite union reckons that JLR's planned job cuts are not expected to impact the UK manufacturing footprint.

Unite represents many “white collar†workers in JLR, and is demanding that JLR and the government ensure all possible options are fully explored and utilised to mitigate job losses.

Unite general secretary Sharon Graham says:

“While the cuts planned are not expected to impact the UK manufacturing footprint, we need to ensure that the company is doing all it can to avoid unnecessary job losses amongst its highly skilled “white collar†workers.
“JLR's vague statement today was not helpful and has only created increased uncertainty. ‘I have been on speed-dial over the weekend with business secretary Jonny Reynolds to look at how to mitigate these job losses at JLR. We are both meeting the CEO of JLR tomorrow. Mayor Richard Parker has also been linking in. “Unite was pivotal in securing the £1.5 billion government facility for JLR after the cyber-attack. The company now needs to make sure it also does all it can to protect these jobs. “Once again Unite will leave no stone unturned to support JLR workers. It cannot be acceptable that workers again are made to pay the price.â€

The UK government insists it is supporting Britain's car sector.

Following JLR's announcement of 4,000 job cuts, a Number 10 spokesperson said today:

“We understand that this will be an uncertain and concerning time for affected workers, their families and the wider communities and we know that current market conditions are challenging for the automotive sector globally. That's why we've taken significant action to back the UK's automotive industry by lowering electricity bills for manufacturers, providing £4bn of capital and R&D funding to manufacture zero-emission vehicles and launching a £2bn electric car grant to encourage people to buy EVs.

“The business secretary is in close contact with JLR and he will be meeting them early this week.

The Mayor of the West Midlands Richard Parker has also announced a £500,000 support package for JLR workers who choose to take voluntary redundancy.â€

Jaguar Land Rover's new voluntary redundancy scheme will cut nearly 10% of its workforce.

JLR employs about 43,000 people globally, including 34,000 in Britain, but did not say where the jobs would be cut, Reuters points out.

Back in the financial markets, the yen has hit a seven-month high against the US dollar.

Japan's currency traded as high as ¥154.05 to the dollar, its highest since February.

That adds to its gains last week, when the yen recovered from lows around ¥160/$, lifted by expectations that the Bank of Japan will hike interest rates later this month.

JLR's decision to slash 4,000 jobs is a sign that Britain's automotive industry is being hit by a “near-perfect stormâ€, warns David Bailey, professor of business economics at the Birmingham Business School .

Bailey explains that JLR's latest job cuts are much more than just another round of corporate restructuring:

“Demand is weak and uncertain. Chinese manufacturers are becoming increasingly formidable competitors. Trade tensions and tariffs are reshaping global supply chains. UK industrial electricity prices remain exceptionally high.

Manufacturers face enormous investment requirements to move towards electric vehicles. And the wider global trading environment is becoming more difficult and unpredictable.

“So, it is too easy, and ultimately too superficial, to portray the difficulties facing JLR simply as the consequence of the cyber-attack or poor management decisions.

Bailey adds that governments also make choices, and urged ministers to treat the current situation as a “strategic industrial emergencyâ€.

The UK cannot simultaneously demand rapid electrification, impose increasingly challenging zero-emission vehicle targets, have some of the highest industrial electricity costs among major economies, and also expect manufacturers to continue investing billions of pounds in British factories and supply chains as though these pressures do not matter. Something has to give.

If the UK loses automotive manufacturing expertise, then it could also lose the industrial capacity needed to deliver decarbonisation.

We could reduce emissions from cars made in Britain while importing an increasing proportion of the cars, batteries and technologies from overseas.

“That is not a successful industrial transition; it is deindustrialisation. JLR's job cuts should therefore be seen as a warning shot. The question is whether Westminster hears it and acts.â€

The Mayor of the West Midlands has announced a £500,000 “rapid-response package†to support JLR workers who are facing the threat of redundancy from today's announcement of 4,000 job cuts.

Mayor Richard Parker hopes this emergency package can find new jobs for workers and keep their advanced manufacturing and automotive skills within the West Midlands regional economy, and believes it could be bolstered by support from the Department of Work and Pensions.

Mayor Parker says he has liased with the government last weekend to discuss how to support workers, explaining:

“The news from JLR will be deeply worrying for thousands of workers and their families, many of them here in the West Midlands. My thoughts are with them first and foremost.

“JLR is hugely important to our region and employs some of the most skilled people in Britain. The company has faced an incredibly difficult period – from the cyber attack last year to the impact of the war in the Middle East and continuing instability around global tariffs and trade.â€

European government bonds are coming under pressure again today, pushing up the the cost of borrowing.

UK 10 and 30-year bond yields have risen by around two basis points (0.02 of a percentage point) today, back towards the multi-year highs seen last week.

Germany's 10-year debt is up 2.5 basis points, while France's equivalent is up 3.3bps.

Bond yields are probably being pushed up by the oil price; Brent crude is up 1.3% tday at $97.55 a barrel, having hit a six-week high of almost $98/barrel earlier today.

JLR's job cuts are expected to fall on managerial staff rather than factory workers, explains Dr Jonathan Owens, senior lecturer in supply chains management at the University of Salford:

“As Jaguar Land Rover (JLR) has opened a voluntary redundancy programme in the UK, it provides a timely example of the continuing pressures facing the automotive sector and raises important questions about the potential impact on the wider supply chain.

“The programme forms part of JLR's strategy to achieve approximately £1.7 billion in savings over the next two years, improve efficiency and reduce its break-even point to 300,000 vehicles. Importantly, the redundancy programme currently focuses on salaried and management employees rather than manufacturing roles.

Liam Byrne MP, chair of parliament's Business and Trade Committee, is urging the government to provide “maximum support†for JLR workers to find new employment.

Byrne says:

“News of up to 4,000 redundancies at JLR is a body blow for workers, families and communities across the West Midlands. Whether or not these redundancies are voluntary, we now need urgent assurances that maximum support will be deployed to help everyone affected find new work.

“But the troubles at JLR underline the challenge facing the Government's reindustrialisation drive. Britain is preparing to spend billions more on defence, infrastructure and new technology. But British business needs cheaper energy and government orders, not at some distant point in the future, but now, now, now.

Newsflash: UK retailer Next has announced it has overturned a court ruling that it had broken equal pay rules by paying its warehouse staff more than workers in its shops.

Next told the City of London that it has “won a landmark victoryâ€, by succeeded in its appeal to the Employment Appeal Tribunal on “the key issue of Basic Payâ€.

This case was brought by 3,540 claimants, who accused Next of paying its retail sales staff – who are overwhelmingly female – lower hourly wages than its warehouse workers, the majority of which are male.

They won a six-year legal fight for equal pay in 2024, which Next appealed.

Today, Next says:

The appeal judgment endorsed NEXT's position that it should not have to pay shop assistants and warehouse operatives the same amount of Basic Pay, in circumstances where the market and working conditions are very different.

The importance of this decision is that the Appeal Tribunal has confirmed that it was justifiable for NEXT to rely on market forces to distinguish between different groups of employees, where there was a good rationale to pay one group more than the other.

There are several reasons why JLR is seeking to make £1.7bn of cost savings, and cutting thousands of jobs.

The first is the tariffs imposed by Donald Trump on car imports into the US. They hit US demand for JLR's luxury cars to the US.

An even bigger blow to its UK operations was a cyber-attack a year ago which drove the company deep into a quarterly loss, and froze its operations for weeks. The hack cost the UK economy an estimated £1.9bn, potentially making it the most costly cyber-attack in British history.

Like all European carmakers, JLR is also facing tough competition from low-cost Chinese automotive rivals. This is hampering their transition to electric vehicles.

Last year, JLR's annual profits slumped by more than 99% to just £14m.

Jaguar Land Rover's decision to slash 4,000 roles comes a day after business minister, Jonathan Reynolds, ruled out stumping up taxpayer's cash to prevent job cuts.

Reynolds was asked yesterday if there could be financial support to protect the jobs, he said:

“Not if it's to bail people out.

“If this is about making sure over time that workforce is right to make the business as â competitive as possible, that's the conversation we need to have.â€

Reynolds is expected to hold crunch talks with Sharon Graham, the general secretary of the Unite union, and JLR's chief executive, PB Balaji, on Tuesday.

Newsflash: Jaguar Land Rover has announced it is cutting 4,000 jobs across the world over the next two years.

The cuts come as JLR grapples with tough conditions in the car market, Donald Trump's tariff wars and the fallout from a cyber-attack last year.

Announcing the cuts, PB Balaji, JLR CEO, said:

“The automotive industry faces significant challenges, with technological change amidst intense competition and ongoing geo-political uncertainty. Through our Growth Reimagined strategy, JLR is moving decisively to strengthen our competitiveness and position the business for long-term success.

Over the next 12 months, we will launch five new products, continue to leverage the strength of our brands and renew our focus on North America, amongst other markets, to help us deliver double digit revenue growth. At the same time, we are reducing organisational complexity and targeting £1.7 billion of savings to lower our break-even point towards 300,000 vehicles and become fitter to compete in a rapidly evolving market.

These actions will support continued investment of £15-18 billion over the next five years in electrification, digital technologies, advanced manufacturing and enhanced customer experiences.

As part of this transformation, we will reduce our global workforce by around 4,000 roles over the next two years. We recognise this will be difficult news for colleagues affected, and are committed to supporting everyone with care, fairness and respect.

Together, these actions will help build a stronger, more competitive JLR for all our stakeholders.â€

This morning's cost of living squeeze comes just as chancellor John Healey prepares to give a speech outlining his economic plans, in the face of last week's ructions in the bond market.

We're expecting Healey to insist that “fiscal credibility is indivisible from good growth,†and pledge that the government's plans to boost growth across the whole country will enable the British economy to “turn a cornerâ€.

My colleague Andrew Sparrow will be live-blogging the speech here: