Vauxhall will close its Luton plant in April, the parent company Stellantis announced.

More than 1,100 jobs at the van-making factory are at risk, but Stellantis said it is hoping to transfer “hundreds” of Luton jobs to the group’s Vauxhall site in Ellesmere Port.

It is now in consultation with unions and employees over the proposals, which will also see it invest £50m into the Ellesmere Port factory.

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The company said it would offer “relocation support” and “an attractive package” to sacked employees who want to transfer to Ellesmere Port in the North West of England from Luton, north of London.

The closure had been warned of by the company’s managing director Maria Grazia Davino. In June she told an industry event, “Stellantis production in the UK could stop”, as more needs to be done to spur consumer demand for electric vehicles.

An industry-wide phenomenon

It is the second British car producer to announce job losses in less than a week. Just six days ago Ford revealed plans to cut 800 roles in the UK as part of a cull of 4,000 jobs across Europe.

Pressures have been on UK car makers to meet the government’s electric car mandate with talks on the 2030 deadline taking place between government and industry.

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Financial penalties are currently levied against manufacturers if zero-emission vehicles make up less than 22% of all sales. This will rise to 80% of all sales by 2030 and 100% by 2035.

Across Europe, the automotive sector has been feeling the pressure of slowed sales and competition from China. On Friday, Bosch – the world’s biggest car parts supplier – reported the loss of 5,500 jobs, predominantly in Germany.

A government spokesperson said: “We have a longstanding partnership with Stellantis and we will continue to work closely with them, as well as trade unions and local partners on the next steps of their proposals.

“The government is also backing the wider industry with over £300m to drive uptake of zero-emission vehicles and £2bn to support the transition of domestic manufacturing.”

The trend of shop prices falling may be reversing as businesses face higher costs, according to industry data.

The pace of price drops slowed this month, according to figures from the British Retail Consortium (BRC).

November was the first time in 17 months that the inflation rate was higher than a month earlier.

While shop prices dropped 0.8% in October compared to a year earlier, the fall slowed 0.6% in November, according to BRC figures.

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The figures may signal the end of falling inflation given cost pressures being placed on big businesses, according to BRC chief executive Helen Dickinson.

Retailers face a barrage of costs which the BRC forecasts will amount to an extra £7bn for retail businesses next year.

Budget measures such as the increase in employers’ national insurance contributions and a higher minimum wage form part of those costs as does the forthcoming packaging tax to fund recycling efforts.

These extra costs will just push up consumer prices, Ms Dickinson said.

“Retail already operates on slim margins, so these new costs will inevitably lead to higher prices.”

The official measure of inflation is already on the up with the first rise in three months recorded in October as energy bills rose. The rate of price rises rose sharply to 2.3% from 1.7% recorded a month earlier as the energy price cap was hiked.

If the government wants to prevent higher shop prices it must reconsider the April 2025 timeline for the new packaging levy and reduce the commercial property tax known as business rates “as early as possible”, Ms Dickinson added.

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The minimum wage uplift will bring pay for people over 21 to £12.21 an hour and take effect in April. People aged 18 to 20 will have to earn at least £10 an hour – something the TUC (Trades Union Congress) said could benefit 420,000 young people – as part of the government’s goal of paying the same minimum wage to all workers, regardless of age.

Also from April, employers will have to pay more national insurance for their staff.

Businesses’ national insurance contributions will increase from 13.8% to 15% with the current £9,100 threshold at which employers start to pay the tax on employees’ earnings lowering to £5,000.

Chancellor Rachel Reeves has defended the increase saying half of all businesses – roughly a million firms – are paying either less or the same national insurance contributions as they were before the budget due to the uprated employment allowance, a tax credit for some employers.

There will be no more tax rises or borrowing for the duration of this government’s term, Chancellor Rachel Reeves has said.

She told business leaders there will not be another budget like her maiden announcement, which included a rise in employers’ national insurance contributions and the national minimum wage.

“I’m not coming back with more borrowing or more taxes. And that is why at this budget, we did wipe the slate clean to put public finances and public services on a firm footing,” she told attendees at the Confederation of British Industry (CBI) conference.

“As a result, we won’t have to do a budget like this ever again.”

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Ms Reeves’ budget has faced sharp criticism from major UK businesses who have said the policy measures will cost them millions, forcing them to raise prices and cut jobs.

Analysis from independent forecasters the Office for Budget Responsibility said the budget would cause inflation to be higher than originally predicted, adding to the disquiet.

But Ms Reeves has insisted there is no alternative to her policies.

“I’ve heard a lot of feedback but what I haven’t heard is a lot of alternatives,” she said on Monday afternoon.

The £22bn “black hole” in public finances needed to be plugged, which necessitated “difficult decisions”, Ms Reeves reiterated.

Full consultation on the employer taxes could not take place with firms, she added, because budgets are supposed to be made to MPs in the Commons and not leaked to industry or the media.

“It is the nature of budgets that you can’t announce or consult in the way over tax rates that you can with other policies,” she said.

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Earlier on Monday, the head of the CBI, one of the UK’s most prominent business groups, said the budget business tax rises will hit firms rather than encourage growth.

A key goal of the Labour government is to grow the economy.

Kingfisher, the owner of Screwfix and B&Q, also said on Monday that the national insurance changes alone would force up its costs by £31m in the next financial year.

Meanwhile, the boss of McVitie’s, Jacob’s and Carr’s said the UK was losing its appeal for his business.

“We would like to continue to be a major investor going forward,” said Salman Amin, chief executive of snack food company Pladis.

But, he warned: “It’s becoming harder to understand what the case for investment is.”