𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Unemployment will rise by more than 400,000 by the end of Labour’s first term in office, taking the total to around two million.

That’s the warning from the British Chambers of Commerce, the latest body to argue that the economy is at best flatlining and that jobs will be hit.

The BCC says unemployment will reach 5.5 per cent, up from 5 per cent now. It also predicts weak business investment, higher inflation and falling exports.

Vicky Pryce, chair of the BCC Economic Advisory Council, said: “The UK economy continues to operate in a fragile and uncertain global environment, which is hitting the BCC’s growth forecast.

“Under certain scenarios of energy costs ahead, the IMF has warned of possible recession for the developed world from which the UK will find it difficult to escape.”

She adds: “Already with geopolitical instability in the Middle East once again feeding through into higher inflation expectations, especially through energy and shipping costs, weaker international demand is weighing on trade performance.”

The lobby group now predicts GDP growth of 0.9 per cent this year, down from 1 per cent in its last forecast.

And it warns that inflation will rise to 3.8 per cent by the end of the year – it is now 2.8 per cent – as energy costs bite. That will make it difficult for the Bank of England to cut interest rates to ease pressure on businesses.

In particular, 16 to 24 year olds will find it hardest to get work, with 167,000 more of them out of work by 2028 than in 2024.

That will take youth unemployment to 17.8 per cent, the worst since 2013.

David Bharier at the BCC said: “The UK is not in recession but the economy remains trapped in a cycle where each recovery is interrupted before gaining traction and firms go back on the defensive.

“With youth unemployment approaching 18 per cent by mid-2027, the UK risks weakening the skills pipeline it needs for the next economy.”

Last week, a report by former minister Alan Milburn warned that job opportunities for young people are shrinking.

“We are at risk of a lost generation,” he warned, with young adults facing a “perfect storm” of challenges, including fewer entry level jobs.

Official figures show that one million young people are not in education, employment or training.

“This is a visceral feeling in the country…it’s bordering on a fear in the country among parents and grandparents that this generation is going to be a lost generation,” Milburn said.

Chancellor Rachel Reeves has been criticised for introducing so-called taxes on jobs, such as increasing National Insurance contributions from employers.

Andrew Griffith, the shadow business secretary, said: “Lower growth, higher inflation and more unemployment is not what the doctor ordered for the UK economy. In fact, the only thing growing seems to be more bad news.

“The government must not be a bystander, but must reverse some of the tax hikes that are crushing families and businesses.”

The Treasury has been contacted for comment