UK employers warns of slower growth, higher unemployment

LONDON, June 9 (Reuters) - The ‌Confederation of ​British ​Industry cut its forecast for the country's economic growth on Tuesday and predicted unemployment would rise ‌to its highest in more than a decade ⁠as the Iran war pushes up energy prices and squeezes living ‌standards.

Consumer price inflation looks set ‌to peak at 3.7% in the first quarter of next year, up from 2.8% in April and similar ​to the rise predicted by the Bank of England.

"What's happening around the world is compounding the UK's low-growth ⁠story. We saw weak momentum throughout 2025, but if it weren't for the ​latest global shocks, we could be having a much more positive conversation about the economy today," ​CBI Chief Economist Louise Hellem ‌said.

Following are more points from the forecast:

• UK GDP to grow 1.1% in 2026 and ⁠0.9% in 2027, 0.2 and 0.6 percentage points less than the CBI forecast last December

• Unemployment to peak at 2.0 million ⁠or 5.5% of the workforce - its highest since mid 2015 - versus ​a previous 5% forecast

• BoE to leave rates unchanged at 3.75% through 2026 and 2027

• The CBI's forecasts are similar to ones released ‌in the past month by the OECD and the IMF

• CBI Chief Executive Rain ‌Newton-Smith last week urged Prime Minister Keir Starmer's government not ⁠to treat business as "a ‌cash tap" and said ​businesses' contribution to overall taxation had risen to a record high.

(Reporting by David MillikenEditing by William ‌Schomberg)

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