{"id":541502,"date":"2026-04-20T18:47:13","date_gmt":"2026-04-20T18:47:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/541502\/"},"modified":"2026-04-20T18:47:13","modified_gmt":"2026-04-20T18:47:13","slug":"quarter-of-a-million-brits-could-lose-job-by-mid-2027-as-iran-war-pushes-uk-to-brink-of-technical-recession","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/541502\/","title":{"rendered":"Quarter of a million Brits ‘could lose job by mid 2027’ – as Iran war pushes UK to brink of ‘technical recession’"},"content":{"rendered":"

An economic forecast from the EY Item Club suggests Britain will \u201dflirt with a recession\u201d and warns unemployment could rise to 5.8 per cent.<\/p>\n

\"Hundreds<\/p>\n

Hundreds of thousands of Brits could lose their jobs within a year, new analysis shows.<\/p>\n

Picture:
\nAlamy
\n<\/a><\/p>\n

A quarter of a million people could lose their jobs by next year amid fears of a looming recession sparked by the Iran war, an analysis has found.\n<\/p>\n

Two reports from top accounting firms suggest the economy is on the brink as gas and oil prices surge following Tehran\u2019s blockade on the Strait of Hormuz.<\/p>\n

An economic forecast from the EY Item Club suggests Britain will \u201dflirt with a recession\u201d, and warns unemployment could rise to 5.8 per cent.<\/p>\n

That\u2019s up from the current five-year high of 5.2 per cent.<\/p>\n

If correct, it would see the number of jobseekers surge from 1.87 million to more than 2.1 million.<\/p>\n

However, EY Item Club also predicted that interest rates will remain on hold throughout 2026 despite soaring inflation caused by the war.<\/p>\n

A separate report by Deloitte found finance bosses at big UK businesses were already watering down spending plans, with action set to impact economic activity and hiring.<\/p>\n

Read more: UK economy grew unexpectedly by 0.5% in February, latest figures show<\/a><\/p>\n

Read more: Reeves warns impact of Iran war on economy will persist once hostilities end<\/a><\/p>\n

\"The<\/p>\n

The Strait of Hormuz has been blocked amid the Iran war – disrupting oil shipments.<\/p>\n

Picture:
\nGetty
\n<\/a><\/p>\n

The forecasters warn the major disruption to supply chains and rocketing energy costs could push Britain to the brink of a \u201ctechnical recession\u201d.<\/p>\n

Susannah Streeter, chief investment strategist at Wealth Club, said: \u201cThere\u2019s a fresh warning about the stark impact of the war in Iran on the UK economy.\u00a0<\/p>\n

\u201cThe closely watched economic forecast from the EY Item Club estimates that Britain will flirt with a recession, and that unemployment is set to rise to 5.8 per cent, up from the current five-year high of 5.2 per cent.\u00a0<\/p>\n

\u201cAlthough the UK economy was in a more resilient shape than expected in February, with growth coming in at 0.5 per cent, there is real concern that the UK will be hit hard by the repercussions of the Middle East conflict.\u00a0<\/p>\n

\u201cCompany insolvencies in March have already jumped markedly compared to last year, and profit warnings are coming thick and fast.\u201d<\/p>\n

She added that companies are set to be hit by the \u201ctriple whammy\u201d of higher energy bills, suppliers passing on higher costs, and consumers \u201ctightening their belts\u201d.\u00a0<\/p>\n

\u201cPlus, there\u2019s huge uncertainty ahead about where interest rates could go, with hopes for rate cuts replaced by expectations of a rate hike instead this year,\u201d she added.\u00a0<\/p>\n

\"Chancellor<\/p>\n

Chancellor Rachel Reeves.<\/p>\n

Picture:
\nGetty
\n<\/a><\/p>\n

It comes after Chancellor Rachel Reeves has vowed to expand support for energy-intensive industries.\u00a0<\/p>\n

But Ms Streeter warned: \u201cThe outlook looks difficult for others, especially in consumer-focused sectors faced with a barrage of bills and weakening demand.\u00a0<\/p>\n

\u201cFirms are battening down the hatches in this unpredictable climate, with hiring set to soften.\u00a0\u201cA separate survey by Deloitte has highlighted this, showing finance chiefs are reining in their spending plans.\u201d<\/p>\n

Matt Swannell, EY Item Club\u2019s chief economic adviser, said: \u201cSpiralling energy costs and disruption to supply chains will push the UK to the brink of a technical recession in the middle of this year.<\/p>\n

\u201cConsumers\u2019 spending power will be squeezed, while more expensive financing arrangements and a less certain global economic backdrop will pour cold water on companies\u2019 investment plans.\u201d<\/p>\n

It follows a gloomy economic outlook report from the International Monetary Fund (IMF) last week showing the UK facing the biggest downgrade to growth among the G7 group of countries, with 0.8 per cent forecast for 2026, down sharply from the 1.3 per cent predicted in January.<\/p>\n

But recent figures showed the UK economy had stronger-than-first thought momentum before the Iran war impact, with data showing GDP grew by 0.5 per cent month-on-month in February \u2013 the fastest expansion since January 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"An economic forecast from the EY Item Club suggests Britain will \u201dflirt with a recession\u201d and warns unemployment…\n","protected":false},"author":2,"featured_media":541503,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-541502","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/541502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=541502"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/541502\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/541503"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=541502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=541502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=541502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}