‘CHANCELLOR Rachel Reeves’ tax raids destroy jobs’, warned a report by The British Chambers of Commerce (BCC) yesterday.
Unemployment will jump by 400,000 under Labour, according to the analysis which shows joblessness is set to hit its highest level in more than a decade.
It warned that together with the use of AI, the tax raids would destroy thousands of entry-level jobs with overall unemployment peaking at 5.5 per cent, the highest for a decade.
Its forecasts suggest that 418,000 more people will be unemployed by the end of 2028, taking the total number of unemployed to two million.
The BCC also cut its growth forecast for this year to 1% and warned that stubborn inflation could force the Bank of England to keep interest rates on hold at 3.75% until 2028.
The BCC poll of business leaders claimed that labour costs remain the ‘main cost pressure for businesses,’ with youth unemployment ‘an area of concern as labour costs and AI erode entry-level jobs’, and demanded the government cut taxes and reduce wages.
The warning from the BCC came just days after former New Labour Health Minister Alan Milburn, who is leading a government review into youth unemployment, said the UK faces a ‘lost generation and demanded urgent action to force young people off social benefits and into low-paid work to cut the government borrowing deficit.
More disastrous economic news about the ending of the decades-long soaring property price rises in the UK housing sector and the danger of collapsing bank mortgages came from the Telegraph’s Ambrose Evans-Pritchard this week.
‘Britain’s housing wealth is in danger of collapsing, with the property price gravy train coming off the tracks. The consequences will be painful, as the endless flow of cash in the sector declines,’ he said.
Since 1982, after adjusting for inflation, figures from the Organisation for Economic Co-operation and Development (OECD) show real house prices in the UK have soared by no less than a staggering 300 per cent.
This explosive expansion was unparalleled in the G7 developed countries. Where, in stark contrast, house prices fell across this period by a staggering 11 per cent, in real terms. This slow-burning property downturn is spreading across the country and will have major ramifications for the wider UK economy.
House prices are falling. Official figures show home values in England slumped by 0.6pc year-on-year in April, but lurking behind these headline figures there is a far more dangerous long-term contraction, as data from Nationwide show that in real terms UK house prices have been falling almost continuously since the start of 2022 and are now down by 17.4%, leaving them broadly on par with those in 2003.
The fear is the UK economy is trapped in a nasty feedback loop with 44% of properties listed over the last three years not sold, according to Zoopla.
Of those sellers who did find a buyer, 53% had to reduce their asking price at some stage during the process, with the average home sold for 3.5% below asking in the first quarter of 2026 – equivalent to around £18,800 less than the original list price.
Soaring energy prices and fears of a new inflation wave have sent borrowing costs up, with the average rate on a two-year fix now 5%. So far this month a typical buyer has had to pay 37% of their salary on their mortgage. This is nearly 10 percentage points higher than the pre-pandemic level of 28%. The US-Israeli war on Iran has also sent borrowing costs soaring.
The UK’s economic prospects are also worsening. Last month, the International Monetary Fund cut its GDP forecasts for the UK as it warned it was more vulnerable to an energy shock than any other advanced economy.
Mobilising the trade unions in a general strike is urgently needed to bring down this rabble of a split Labour government, and go forward to a workers’ government and socialism, with a nationalised economy and with the banks and industries expropriated, publicly owned and controlled. This is the only way out of this terminal capitalist crisis. Recall the TUC to organise a general strike and take the power. Join the Workers Revolutionary Party today without delay.