Soaring energy prices could force companies to axe workers, the newspaper has reported
More than 100,000 Britons are at risk of losing their jobs due to market turmoil in the wake of the US-Israeli attack on Iran, The Telegraph reported on Monday.
Oil prices have jumped to over $100 per barrel amid supply disruptions brought on by the conflict, up from around $70 last month.
James Smith, from investment bank ING, has warned that if the conflict continues, employers will offset higher energy costs by axing their workforce or suspending hiring, according to the newspaper.
“It depends how long energy prices stay high. If we’re in a scenario where the disruption lasts three months or so,” unemployment could “be pushing above 5.5%,” he added.
Currently, 5.2% of the British population is unemployed, a high unseen since the Covid pandemic, according to government data.
“With UK industrial energy costs among the highest in the developed world, any sustained increase in oil and gas prices could quickly push up input costs, squeezing margins and limiting investment,” according to Fhaheen Khan, senior economist at industry body Make UK.
He told the outlet that domestic demand in British manufacturing has now “collapsed,” despite the industry seeing some growth since the start of the year.
Mizuho Bank’s Jordan Rochester warned that the UK economy is now in a far weaker position than four years ago, when the EU and UK began to phase out affordable Russian gas and oil over the Ukraine conflict. UK unemployment rates stood at 3.8% that year.
Recent polls show that most Britons fear that the Iran conflict will further damage the UK economy.
According to a YouGov poll published Monday, more than three quarters of respondents think that the hostilities in the Middle East will have a negative impact on the UK and global economies in the longer term. Some 64% believe that the conflict will hit their household finances.
