CBI sees UK growth slowdown, unemployment to 2 million

The UK economy faces a significant slowdown and rising unemployment, according to a new forecast from the Confederation of British Industry. The business group warns that global shocks, including conflict in the Middle East and higher energy costs, are compounding domestic pressures.

The CBI's latest outlook, published Tuesday, projects that an additional 200,000 people will become unemployed by the end of 2026, pushing the national jobless rate to 5.5 percent, or approximately two million individuals. The most recent official data from the Office for National Statistics showed a rate of 5 percent, equating to around 1.8 million people. The forecast suggests a slight improvement to 5.3 percent unemployment in 2027.

Economic growth is also expected to falter. The CBI downgraded its projections, now forecasting UK gross domestic product growth to slow from 1.4 percent in 2025 to 1.1 percent in 2026 and just 0.9 percent in 2027. This marks a reduction from its previous expectations of 1.3 percent growth this year and 1.5 percent next year.

Chief Economist Louise Hellem attributed the bleak assessment to external factors disrupting the UK's existing low-growth trajectory. She stated...