Slowing growth and rising energy prices will lead more than 160,000 job losses across the UK economy, according to a key forecaster.
EY Item Club expects the manufacturing, construction and retail to be particularly hard hit by the effects of the Iran War on the supply chain.
The forecaster, which uses the Treasury’s economic modelling, is estimating a net loss of 163,000 jobs this year, representing a 0.4% drop in employment.
Energy-intensive sectors will be hardest hit and the effects will spread to retail, accommodation and hospitality as disposable income is squeezed.
The unemployment rate is on course to rise above 5% in Glasgow from a 4.3% average recorded last year. Cambridge is the only major city where overall employment is on course to grow modestly over the year.
Public sector jobs are likely to largely escape the jobs cull, the Item Club said.
A separate report from KPMG and the Recruitment and Employment Confederation said the number of permanent job placements across the economy is falling at the fastest pace since the start of the year.
The pace of hiring for temporary workers is at the highest since 2023, according to the report.
“The prevailing economic environment led to a preference for short-term staff at some firms who wanted to push ahead with business development and expansion plans,” Neil Carberry, chief executive of the REC said.
“Businesses will be particularly concerned about the impact on inflation, their borrowing costs and any disruption to wider supply chains.”
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