CBI Lowers UK Growth Outlook, Predicts Higher Unemployment Amid Global Pressures
CBI Economic Forecast and Key Predictions
Overview of the Forecast
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.
Inflation and Economic Momentum
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.
Global Factors Impacting the UK
"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.
Key Points from the CBI Forecast
GDP and Unemployment Projections
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
Monetary Policy and Comparisons
- 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
Business Taxation and Policy Recommendations
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)
