Speaking on ET Now, she underlined that the Middle East conflict represents “a historically large energy shock with an asymmetric macro risk,” adding that high-frequency indicators are already signalling a moderation in momentum.

Growth momentum softens as activity indicators weaken
Gupta Jain pointed to internal indicators tracking economic momentum, noting a divergence between demand and activity trends.She said, “As you rightly pointed out, this Middle East conflict represents a historically large energy shock with an asymmetric macro risk. In fact, we have a lead indicator known as UBS India Composite Economic Indicator, which is basically a compilation of 15 high frequency data points on India. And this is telling me that for the month of March, economic momentum has started to moderate.”

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However, she highlighted resilience in consumption demand even as broader activity cools.
“If I look at the auto sales data for the month of March, even for the month of April, the demand indicators are actually holding up. The activity indicators have started to moderate and that is where the problem is because supply disruptions is having a disproportionate impact on selective sectors.”
GDP forecast cut to 6.2%, downside risks remain open
The growth forecast has been revised downward, incorporating both external energy shocks and domestic monsoon uncertainty.

“We are now estimating GDP growth from 6.7% which was our estimate earlier to 6.2%. This is almost 50 basis point below consensus and this is actually taking into account both the external shock on account of the energy and as well as monsoon related uncertainty,” she said.

She added that scenarios remain highly fluid:

“In case the conflict deescalates quickly and from June onwards we start to see oil starting to flow through the Hormuz, there will be upside towards 6.5% to my GDP growth forecast. But in an extended energy shock scenario where say oil is at $150, eventually India’s GDP can even slow down to 5–5.5%.”

Supply-side stress visible; demand impact likely delayed
On transmission of shocks, Gupta Jain noted that supply-side disruptions are already visible in data, while demand tends to respond with a lag.

“I can clearly see fertiliser production contracting by nearly 25% year-on-year. We did realise that now the gas supply to the fertiliser sector was actually adjusted higher in the month of April, so that would have provided some relief,” she said.

She added that demand resilience may not last indefinitely if supply pressures persist.

“Supply disruptions at least in the data is already visible. Demand side data points when you start seeing a slowdown, it should happen with at least a quarter lag.”

Inflation concerns rise; CPI forecast revised upward
While growth risks remain significant, inflation appears to be the more persistent macro challenge.

“Even if there is a quick deescalation, the inflation concerns could linger a bit longer than the growth concerns,” she said.

The CPI inflation forecast has been revised higher.

“We have also revised our CPI inflation forecast from 4.6% which we were estimating earlier to 5.2%. This is reflecting both higher energy prices plus the broader spillover from the Middle East conflict.”

She flagged multiple inflationary triggers already visible:

“Airfare prices have started going up driven by elevated ATF prices, prices because of higher commercial LPG cost, there are supply chain disruptions on the ground. Rupee has underperformed and there are inflation risks coming because of weaker INR.”

Fiscal pressure manageable, but risks of overshoot remain
On the fiscal side, Gupta Jain said policy response has leaned more on fiscal tools in the current global stagflation-like environment.

“We have seen that the policy mix has actually tilted towards fiscal rather than monetary,” she noted.

She added that while the official fiscal target remains largely intact, risks persist if energy disruptions continue.

“The central government targeted a fiscal deficit of 4.3% of GDP. My starting point of fiscal deficit is coming at 4.4% of GDP. As of now, we are seeing that the government might actually stick to the 4.4% GDP fiscal deficit target. There is definitely a risk of temporary overshoot of around 20 to 30 basis points if the energy disruptions persist for longer.”

Outlook: Inflation to outlast growth shock
Even in a scenario of geopolitical de-escalation, Gupta Jain believes inflation pressures may prove stickier than growth disruptions, with food inflation and currency weakness emerging as key watchpoints for policymakers in the coming quarters.

HM Revenue & Customs has suffered a major blow in one of the longest-running and most consequential employment status disputes in British tax history, with a tribunal ruling that 60 football referees engaged by the Professional Game Match Officials Limited (PGMOL) were genuinely self-employed, not employees, as the tax authority had insisted for almost a decade.

The decision, handed down at the First-tier Tribunal, means HMRC will be denied £584,000 in employment taxes it had argued were owed. The department retains the right to appeal, but the verdict has already been seized upon by tax specialists as a potentially seismic moment for the millions of contractors, freelancers and businesses operating in the UK’s flexible labour market.

Specialist contractor insurance provider Qdos described the outcome as one of the most significant employment status rulings in history, warning that it lays bare a “fundamental flaw” in HMRC’s own Check Employment Status for Tax (CEST) tool, the digital instrument introduced in 2017 and used millions of times to determine whether a worker should be taxed as employed or self-employed.

The case turned on two principles long regarded as the bedrock of employment case law: mutuality of obligation (MOO), whether a worker is obliged to accept work and the engager obliged to provide it, and control, namely the extent to which a business directs how services are performed. The tribunal ruled that referees were neither mutually obliged to work for PGMOL nor sufficiently controlled in how they performed their duties to be classed as employees.

Seb Maley, chief executive of Qdos, said the ruling directly undermines HMRC’s interpretation of the very rules it polices.

“This landmark verdict directly challenges HMRC’s very understanding of employment status, exposing a fundamental flaw in the tax office’s employment status tool, which is in desperate need of an overhaul,” he said.

“For years, HMRC has insisted that mutuality of obligation exists in every contract, so much so that its CEST tool barely scratches the surface on it. The latest twist in this case highlights the need for a rigorous review of CEST, which has been used millions of times to set the employment status of individuals, in turn determining whether they pay tax as a self-employed worker or employee.”

Maley added that the result should reassure firms that engage contractors. “Make no mistake, this result is good news for businesses that engage contractors and self-employed workers, ultimately because it proves that factors like mutuality of obligation and control really aren’t as narrow as HMRC has been contending.”

He also took aim at the sheer length of the proceedings. “With the first hearing in 2018, we’re nearly a decade into this case, the result of which could yet be appealed. If that doesn’t highlight the desperate need for the simplification of employment status, I don’t know what does. With a government consultation on the matter underway, it’s vital that verdicts like this, which put people through hugely stressful ordeals and cost the taxpayer a staggering amount, are taken into account.”

A decade in the courts

The dispute stretches back to PGMOL’s engagement of referees as self-employed contractors during the 2014/15 and 2015/16 tax years. HMRC opened the first front in 2018, arguing at the First-tier Tribunal that the officials should have been treated as employees because they were mutually obliged to work for PGMOL.

The FTT disagreed, finding insufficient mutuality of obligation. HMRC appealed and lost again at the Upper Tribunal in 2020, which upheld the original ruling that the minimum test for employment had not been met.

A further HMRC appeal took the case to the Court of Appeal in 2022, which reversed the earlier decisions and concluded that mutuality of obligation did exist on each match day, sending the dispute back to the FTT for reconsideration.

PGMOL escalated matters to the Supreme Court in 2024, where its appeal was dismissed, again sending the case back to the FTT. It is at this latest hearing that PGMOL’s position has now finally been vindicated, with the judge ruling that the referees were neither mutually obliged to work nor sufficiently controlled by PGMOL to be employees.

For Britain’s SME community, which leans heavily on freelance and contract labour, the decision is more than a footnote in a niche sporting dispute. It strikes at the heart of how HMRC interprets and enforces the very employment status rules it designed, and adds further pressure on Whitehall to deliver the long-promised simplification of a system that has tied businesses, workers and the courts in knots for years.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.

Britain’s over-50s are paying the heaviest price for Labour’s workers’ rights overhaul, with the number of older jobseekers unable to find work climbing by 22 per cent since 2023, according to the latest figures.

Just shy of a million workers aged 50 and above are currently locked out of the labour market, the latest Labour Force Survey data shows, with the age group consistently registering the highest rates of redundancy across the workforce.

Some 917,000 people aged 50 to 66 are unable to find a job, rising to 996,743 once those aged 66 to 70, many of whom remain keen to work despite being eligible for the state pension, are included.

Industry leaders have laid the blame squarely at the door of the Employment Rights Act and the Chancellor’s increase in employer National Insurance contributions (NICs), arguing that the combined cost has made firms markedly more cautious about taking on new hires, particularly more experienced and therefore more expensive ones.

“Older workers, likely on higher salaries than their Gen Z colleagues, have borne the brunt of businesses reassessing their hiring strategies,” said Kevin Fitzgerald, UK managing director at jobs platform Employment Hero.

Alex Hall-Chen of the Institute of Directors echoed the concern, pointing to the Employment Rights Act, the rise in employer NICs and successive increases to the minimum wage as a triple blow that has dampened employer appetite for risk.

Although the Act’s provisions apply to workers of all ages, several measures hit older employees disproportionately hard in practice. The scrapping of the cap on payouts for successful unfair dismissal claims is widely expected to prove costlier in cases involving over-50s, who tend to command higher salaries and whose tribunal awards are typically calculated as multiples of pay.

The Act’s expanded right to request changes to hours or location, particularly where employees are juggling health conditions or caring responsibilities — is also likely to be invoked more frequently by workers in their 50s and 60s, many of whom are supporting elderly parents or managing their own long-term conditions.

Compounding the picture are structural shifts beyond Westminster’s control. The rapid adoption of artificial intelligence across white-collar roles and the lingering hangover from the post-Covid jobs downturn have together hollowed out mid-to-senior positions that older workers have traditionally relied upon.

Lyndsey Simpson, founder of career-coaching platform 55/Redefined, said the fallout from losing a senior or well-remunerated role in one’s 50s can be devastating and long-lasting.

“That’s why people are ‘age-scrubbing’ their CVs. They remove dates, hide early roles and play down seniority because they know age can work against them before they even get an interview,” she said.

Dr Andrea Barry of the Centre for Ageing Better warned that the scale of the crisis among older workers is now comparable to the much-discussed plight of young people not in education, employment or training (Neets), yet receives a fraction of the attention.

“The Government is right to invest in solutions for the current youth employment crisis, but the labour market is in crisis at both ends of the age range and on a similar scale,” she said.

For SME employers already grappling with rising payroll costs, tightening tribunal exposure and the spectre of further regulation, the temptation to play it safe at the recruitment stage is proving difficult to resist, and it is Britain’s most experienced workers who are bearing the cost.

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