Britain is set to lose 163,000 jobs this year, with lower-income regions bearing the brunt of the economic fallout from the Iran war, according to a new report by the Item Club. The regional outlook highlights south Wales and Humber as the most vulnerable areas, with projected job losses of 5,700 and 2,800 respectively by 2026.
The report attributes the downturn to rising energy prices and supply chain disruptions caused by the Middle East conflict, which particularly affect manufacturing and construction sectors. Tim Lyne, economic adviser to the Item Club, said: 'Some of the lowest income regions will feel the biggest effects of the manufacturing and construction sectors reducing headcount.'
Overall UK employment is forecast to decline by 0.4 per cent this year, with major cities also hit hard. London is expected to lose 25,000 jobs, Birmingham 12,500, Leeds 9,800, and Glasgow 6,200, as retail and hospitality sectors contract due to reduced consumer spending.
However, Cambridge is anticipated to see employment growth, while Belfast and Edinburgh face relatively limited losses. Publicly funded sectors like education and health are expected to increase hiring, but not enough to offset broader job market contractions.
The report warns of widening living standards disparities, with lower-income households spending up to 13 per cent of disposable income on energy and food in cities like Newcastle, Belfast, and Birmingham, compared to less than 9 per cent in London. A government spokesperson acknowledged the impact of the war but highlighted recent improvements in the labour market and measures to support manufacturers.
