Report: Zain Ali Khan:
Britain’s jobs market is facing growing pressure as global tensions threaten to worsen the outlook for workers across the country. The ongoing conflict in Iran could deepen the UK’s employment crisis, potentially pushing more than 100,000 additional people out of work, economists have warned. The unemployment rate is already at a five year high of 5.2 per cent, but experts believe it could rise above 5.5 per cent in the coming months.
Rising instability in the Middle East is expected to drive up energy costs, placing further strain on businesses and forcing some employers to cut jobs. If this happens, the total number of unemployed people in Britain could move close to two million.
The figures highlight how the UK labour market is weakening. Britain now has a higher unemployment rate than Italy, which has traditionally been seen as one of Europe’s weaker economies. It is the first time this has happened since the 2008 financial crisis. Analysts warn that Donald Trump’s military intervention in Iran is creating conditions that will inevitably worsen labour market conditions.
James Smith, an economist at investment bank ING, indicated that the duration of elevated energy prices would prove decisive for employment outcomes. “It depends how long energy prices stay high. If we’re in a scenario where the disruption lasts three months or so, then I would imagine unemployment would be pushing above 5.5per cent,” he said.
Employers facing sustained cost pressures would likely respond by reducing headcount or halting recruitment altogether, Mr Smith explained.
Work and Pensions Secretary Pat McFadden is set to announce a £1billion package on Monday, aiming to incentivise employers to hire young people and create 200,000 jobs.
This “new deal” seeks to reverse the growing number of “Neets” – young people not in education, employment or training. The initiative includes a new Youth Jobs Grant, offering businesses £3,000 for each 18-24 year old hired who has been unemployed for six months or more, supporting an estimated 60,000 individuals.
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