A closely watched survey shows that the UK job market is experiencing its longest stretch of weakness since the start of this century, with the period of contraction now exceeding that of the global financial crisis.

The S&P Global UK Purchasing Managers' Index shows that companies have been cutting staff for a 24th consecutive month.

This data will worry Andy Burnham's government ahead of the budget to be announced later this month. Energy shocks are intensifying, and the development of artificial intelligence could dampen corporate demand for labor.

Companies have been shedding jobs since the Labour government raised wage-related taxes and the minimum wage shortly after returning to power in 2024.

However, there are also some signs that the employment downturn may be bottoming out. The pace of job cuts in the services sector was the smallest in nearly a year.

In addition, the UK's official unemployment rate remains far below post-global-financial-crisis levels.

Although the UK economy performed strongly in the first half of this year, far exceeding expectations, the labor market has remained weak.

The S&P Global survey shows that the UK private sector as a whole is still able to withstand the energy shock, with stronger consumer spending and demand for technology services as companies race to adopt AI providing support for overall demand.

The September composite PMI fell to 52 from 52.5 the previous month, but remained above the 50 mark that separates expansion from contraction, and was also slightly above the preliminary reading of 51.7.

However, since energy prices rose again last month, the economic outlook has weakened. Traders have increased bets that the Bank of England will raise interest rates multiple times to prevent inflationary pressures from spreading through the broader economy.