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UK Set to Shed 163,000 Jobs Amid Iran War Fallout
The economic woes caused by the Iran war are expected to cost the British economy jobs this year. With no sign of an end to the conflict, the latest regional outlook from the Item Club shows the UK economy is expected to shed 163,000 jobs this year.
It warns that lower income regions – such as South Wales and the Humber – will be hit hardest by the economic shock from the Middle East. Both areas are heavily reliant on manufacturing and construction industries, which are suffering from higher energy costs and supply disruption.
Item Club, an economic forecasting group, predicts 5,700 jobs will be lost in South Wales, and 2,800 in the Humber over the year. But the economic damage from the energy shock will run wider – as households across the country cut back on discretionary spending in the face of a surge in the cost of living.
That will hit the retail and hospitality sectors, with Item Club predicting that employment in London will drop by 25,000 this year as its retail and hospitality sector slows, with a 12,500 reduction in Birmingham, 9,800 drop in Leeds and 6,200 decline in Glasgow.
Tim Lyne, economic adviser to the Item Club, says: “Some of the lowest income regions will feel the biggest effects of the manufacturing and construction sectors reducing headcount in the face of rising energy prices and supply chain disruption. While consumers in these areas typically have less rainy-day savings, which will reduce spending in the retail and hospitality sectors.”
This forecast of rising unemployment will not lift the government’s spirits, with Keir Starmer facing a fight for his political life today after last week’s local election results.
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The Agenda
- 1pm BST: UK Finance hosts ‘Growth Delivery Summit’
- 3pm BST: US existing home sales report for April
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