Britain is set to lose 163,000 jobs this year due to economic turmoil triggered by the Iran war, with lower-income regions facing the heaviest blow, according to a new report from the Item Club.
The report warns that South Wales and the Humber will endure the most severe jobs market difficulties, owing to sharp rises in energy prices. Both areas are heavily dependent on manufacturing and construction, which are expected to cut jobs in response to escalating costs and supply disruption.
Employment is predicted to fall by 5,700 in South Wales and by 2,800 in the Humber throughout 2026. Overall, UK employment is forecast to contract by 0.4% this year, driven by a downturn in consumer spending and rising costs.
The Bank of England has cautioned that the UK unemployment rate could reach 5.6% this year, up from 5.2%. The Item Club expects employment in London to fall by 25,000, with reductions of 12,500 in Birmingham, 9,800 in Leeds and 6,200 in Glasgow.
However, Cambridge is projected to see employment growth, while Belfast and Edinburgh are expected to experience relatively modest job losses. The report also warns of a widening gap in living standards across the UK, with low-income areas facing the sharpest increases in the cost of living.
A Government spokesman said: 'We cannot escape the effects of the war in the Middle East... We will do everything we can to support the country through this period, including by slashing energy bills by up to 25% for 10,000 manufacturers.'
