Confederation of British Industry<\/a> (CBI) warned that around 200,000 more Britons are on track to become unemployed in a gloomy outlook for the state of the economy.<\/p>\nIts latest economic forecast predicted that UK unemployment will rise to 5.5% this year, which would represent around two million people.<\/p>\n
The unemployment rate was most recently reported at 5%, or around 1.8 million people, by the Office for National Statistics.<\/p>\n
Economists from the CBI said the weakening labour market is linked to reduced business investment in the face of higher cost inflation and concerns over consumer spending.<\/p>\n
It predicted that unemployment will then reduce to around 5.3% for 2027.<\/p>\n
It came as the organisation downgraded its growth projections for the next two years.<\/p>\n
Forecasts predicted that UK gross domestic product (GDP) will slow from 1.4% growth last year to 1.1% in 2026 and then 0.9% in 2027.<\/p>\n
Previously, it had pointed towards growth of 1.3% this year and 1.5% in 2027.<\/p>\n
The downbeat outlook is largely caused by the impact of the conflict in the Middle East, which has caused inflation to lift above forecasts and dampened sentiment.<\/p>\n
Higher global energy prices, disrupted supply chains, and increased uncertainty for businesses and consumers are all set to weigh on growth.<\/p>\n
Louise Hellem, chief economist at the CBI, said: \u201cWhat\u2019s happening around the world is compounding the UK\u2019s low-growth story.<\/p>\n
\u201cWe saw weak momentum throughout 2025, but if it weren\u2019t for the latest global shocks, we could be having a much more positive conversation about the economy today.<\/p>\n
\u201cLast year it was tariffs and this year it\u2019s the conflict in the Middle East.\u201d<\/p>\n
The projections also indicated that inflation is likely to increase \u201ctowards 4%\u201d by the end of this year, as higher energy costs feed through to firms and households.<\/p>\n
UK consumer prices index (CPI) inflation was most recently recorded at 2.8% in April but is expected to accelerate in the coming months.<\/p>\n
The CBI said it expects the Bank of England to maintain interest rates at their current level of 3.75% for the rest of this year.<\/p>\n","protected":false},"excerpt":{"rendered":"The Confederation of British Industry has forecast weaker economic growth and a rise in unemployment (Aaron Chown\/PA) –…\n","protected":false},"author":2,"featured_media":469143,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[251,138,784,219,788,782,111,43,785,783,786,139,69,787,255],"class_list":["post-469142","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-breaking-news","tag-business","tag-daily-news","tag-economy","tag-global-news","tag-inkl","tag-new-zealand","tag-news","tag-news-app","tag-news-headlines","tag-news-today","tag-newzealand","tag-nz","tag-today-news","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/469142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=469142"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/469142\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/469143"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=469142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=469142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=469142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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