Britain set to shed 160,000 jobs as energy costs and stalling growth bite

"Britain's labour market is bracing for its sharpest contraction in years, with more than 160,000 roles forecast to vanish over the course of 2026 as anaemic growth and stubbornly high energy bills combine to squeeze employers across the country's industrial heartlands."

"According to its latest analysis, a net 163,000 jobs will disappear this year, representing a 0.4 per cent decline in total employment and dealing a fresh blow to a workforce already feeling the strain of 18 months of cooling demand."

"The pain, the Item Club warns, will fall disproportionately on energy-intensive manufacturers, the construction trade and the high street, three sectors that between them prop up tens of thousands of SMEs and the supply chains that orbit them. As disposable incomes are eroded, consumer-facing businesses in retail, hospitality and food service are expected to feel a secondary shockwave."

""The hit will be felt in lower-income regions where consumers typically have less rainy-day savings, which will reduce spending in the retail and hospitality sectors," said Tim Lyne, an adviser to the Item Club, in a candid assessment of how the downturn will play out beyond the M25."

Britain’s labour market is expected to contract sharply in 2026, with more than 160,000 roles forecast to disappear as anaemic growth and high energy bills reduce demand and pressure employers. A net 163,000 jobs are projected to be lost, implying a 0.4% decline in total employment after 18 months of cooling demand. The impact is expected to fall disproportionately on energy-intensive manufacturers, construction, and high-street businesses that support many small and medium-sized enterprises and their supply chains. Retail, hospitality, and food service face a secondary shock as disposable incomes erode. Job losses are forecast to be uneven across regions, with unemployment rising in Birmingham and Glasgow, while Cambridge is expected to see modest employment gains due to its knowledge-economy base.

Read at Business Matters