Warning of unemployment surge as business costs force companies to close
Unemployment warning as businesses face cost hike
- UK unemployment reached 5.1 per cent in the three months to October, marking the highest level since the Covid pandemic and an increase from 4.3 per cent a year prior.
- Experts predict unemployment could further rise to between 5 and 5.5 per cent by the end of 2026, which would be the highest rate since 2015.
- This anticipated increase is attributed to sustained high interest rates, rising employment costs, elevated energy bills, and inflation, which are forcing many businesses to close.
- The economic pressures are expected to lead to the closure of “zombie companies” – struggling firms that barely survive – potentially causing short-term job losses but fostering long-term economic productivity.
- Young people aged 18 to 24 are disproportionately affected, with an 85,000 increase in unemployment in three months, and future minimum wage changes could further deter hiring of inexperienced youth.