- Insights
60% of businesses pause hiring in response to National Insurance hike
UK Electronic Travel Authorisation (ETA) open to non-European visitors
According to the UK government’s official website (GOV.UK), the Electronic Travel Authorisation (ETA) is now open to applications from all eligible non-European visitors.
The ETA is an electronic travel authorisation that must be applied for online via the UK government website or app before travel. Each application costs £10 per person and permits multiple visits to the UK within two years (with a maximum stay of six months per visit).
Starting from 8 January 2025, visitors from non-European countries such as the US, Canada, and Australia, who currently enjoy visa-free travel to the UK, will need to obtain ETA authorisation before entry. For European travellers, ETA applications will open on 5 March 2025. From 2 April 2025, all eligible visa-free and transit travellers (excluding UK and Irish citizens) must acquire an ETA before arriving in the UK.
Meanwhile, a reminder for those holding various UK immigration visas – don’t forget to complete your electronic visa (eVisa) application before 31 December 2024. The UK Home Office has confirmed that after 31 October 2024, it will no longer issue or replace Biometric Residence Permit (BRP) cards. Eligible visa holders will need to create an account on the UKVI website by the end of 2024 to obtain an eVisa.
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60% of businesses pause hiring in response to National Insurance hike
According to an analysis by the London Standard, the employer National Insurance increase announced by Chancellor Reeves in the Autumn Budget will generate approximately £25 billion in additional revenue. Of this, one-fifth (over £5 billion) will come from businesses in London, potentially delivering a blow to already struggling high streets and small-to-medium enterprises.
Additionally, a survey of 400 business owners across various sectors found that nearly 60% of respondents have already paused hiring due to the National Insurance increase.
Employers in labour-intensive sectors such as hospitality, retail, construction, and logistics warn that the new tax rates, effective April 2025, will directly lead to wage freezes, hiring halts, and inevitable business closures.
In the Autumn Budget, Chancellor Reeves announced that the employer National Insurance rate would rise from the current 13.8% to 15%—the largest single tax increase in the budget. Although expected, the taxable income threshold will also be lowered from £9,100 to £5,000. This means employers may now pay National Insurance for thousands of low-paid part-time workers and students.
For the hospitality industry, the cost of employing a single worker will increase by £615 annually under the new rule. With the National Living Wage rising in April 2025, this cost could climb to around £1,000 annually.
Government statistics show that National Insurance contributions from employers and employees will reach £178.6 billion in 2024, making it the third-largest source of revenue after income tax and VAT. Of this, £37.5 billion (21%) comes from London.
In response to the controversy and criticism following the Autumn Budget, Chancellor Reeves stated at last week’s Confederation of British Industry (CBI) conference that there would be no further tax increases or borrowing during the current government term. She emphasised that the Labour government’s next primary goal is economic growth.
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Bank of England warns of rising mortgage costs for millions
The Bank of England (BoE) has warned that millions of mortgage holders in the UK could face increased repayments over the next three years.
By 2027, it is estimated that approximately 4.4 million mortgages will see repayment increases, with around 420,000 households facing monthly increases of £500. The BoE also cautioned that global economic risks are rising, citing international tensions in trade as a significant risk to broader financial stability.
However, around a quarter of borrowers are expected to see their repayments decrease. In its latest financial stability report, the BoE stated that household finances remain generally resilient, and households are better positioned to handle mortgage repayments than earlier forecasts suggested this year, noting that ‘while many UK households, including renters, are still facing pressures from the increased cost of living and higher interest rates, the share of households who are behind in paying their mortgages is low by historical standards’.
Regarding global conditions, the BoE stated that ‘uncertainty around, and risks to, the global economic outlook have increased’. It highlighted factors such as elections in the UK and US, the ongoing Russia-Ukraine and Middle East conflicts, and potential shifts in macroeconomic and financial policies under newly elected governments.
Despite the lack of certainty surrounding potential import tariffs under a future Trump administration, particularly on goods from Canada, Mexico, and China, the BoE indicated that such measures could signal further global trade fragmentation, posing risks to UK financial stability.
The BoE also concluded that since last month’s budget, the UK government’s borrowing costs (measured by bond yields) have risen. However, markets continue to function smoothly. The BoE emphasised that UK lenders remain capable of supporting households and businesses even if economic risks worsen.
