Business
UK unemployment set to hit five-year high as tax rises begin to bite, EY warns
UK unemployment is expected to rise to its highest level in five years in 2026 as previously announced tax increases begin to weigh on growth and hiring, according to new forecasts from the EY Item Club.
The forecasters warned that joblessness could peak at 5.2 per cent in the first half of this year, up from the current 5.1 per cent and the highest level since January 2021, as modest economic growth is constrained by tighter fiscal policy and global uncertainty.
The EY Item Club said tax rises announced by Rachel Reeves in her first Budget are set to have a more pronounced impact this year, dampening both consumer spending and business investment. Employers were already hit by a £25 billion increase in national insurance contributions last spring, a move that business groups have warned would curb hiring.
Matt Swannell, chief economic adviser to the EY Item Club, said the effects of fiscal tightening are only now starting to filter through the economy.
“Further tax rises may not be expected in 2026, but previously announced measures will begin to raise revenues,” he said. “At the same time, the government will need to rein in borrowing and keep public spending broadly flat to meet its fiscal rules.
“This tightening of fiscal policy, alongside ongoing global uncertainty, is expected to drag on UK growth over the next year or so.”
Economic growth is forecast to remain subdued. The EY Item Club now expects UK GDP to grow by 0.9 per cent this year — slightly higher than its previous estimate of 0.8 per cent, but still weaker than in 2025. Growth is then projected to recover modestly to 1.3 per cent in 2027 and 1.4 per cent in 2028.
Reeves announced a further £26 billion of tax increases in last November’s Budget, although, as with her earlier package, many of those measures will not take effect for several years. Even so, the cumulative impact of higher taxes is expected to weigh on confidence.
The EY Item Club said global risks remain a major headwind. Trade tensions and tariff disruption, particularly linked to the policies of Donald Trump, are expected to continue undermining private sector sentiment.
Financial markets were unsettled in January after Trump tested Nato alliances and announced plans to nominate Kevin Warsh as the next chair of the Federal Reserve, adding volatility to currency and commodities markets. Concerns have also lingered around inflation and public spending commitments in major economies, including Japan.
On monetary policy, the EY Item Club expects the Bank of England to hold interest rates steady at its meeting this week, before cutting again in April. Rates were reduced four times last year, falling from 4.75 per cent to 3.75 per cent.
Despite slower growth and rising unemployment, pay growth is expected to remain relatively resilient. The EY Item Club forecasts average salaries will rise by around 3 per cent this year, though that will translate into only modest improvements in living standards as higher taxes and prices continue to erode household incomes.
The outlook suggests that while a deep recession is not expected, the UK faces a period of weaker growth and rising labour market pressure as fiscal tightening and global uncertainty converge.
Business
Global Market Today: Asian stocks open higher with Iran deadline in focus
Brent crude trimmed its opening gains to trade just under $110 a barrel as markets remained volatile before Trump’s Tuesday 8 p.m. Eastern Time cutoff. US equity-index futures erased initial losses to trade little changed.
Asian shares opened higher with the MSCI Asia Pacific Index climbing 0.7% on the back of gains in South Korea. Technology stocks — seen as less impacted by the war in the Middle East — led the advance, with Samsung Electronics Co. climbing 1.5% after profit surged eight-fold.
Trump said talks with Iran are “going well” ahead of the deadline to agree to a deal, even as he insisted that freedom of navigation through the Strait of Hormuz must be part of any accord. If Iran doesn’t agree to the US’s terms, the military may destroy “every bridge in Iran by 12 o’clock tomorrow night” and put every power plant “out of business,” Trump warned Monday.
“It’s clearly too early for market watchers to stop thinking about geopolitical risk,” said Jeff Buchbinder at LPL Financial. “For now, we believe the best course of action for investors is to be patient.”
Iran reportedly passed to mediator Pakistan a rejection of a ceasefire proposal. It demanded a permanent end to the war, lifting of sanctions, and reconstruction efforts, in addition to protocol for safe passage through Hormuz, according to the state-run Islamic Republic News Agency.
While traders kept a close eye on geopolitical developments, they awaited this week’s key inflation readings. Data published Monday showed the US service economy expanded in March at a slower pace as employment shrank by the most since 2023 and input prices accelerated.The mixed economic signals illustrate the uncertain time for most businesses, according to Jeff Roach at LPL Financial.
“A prolonged struggle over the Strait of Hormuz into May and June would markedly darken the outlook for the US and the global economy,” he said. “For now, given last Friday’s payroll numbers, Fed policymakers have the luxury of remaining in ‘wait and see’ mode.”
Business
Non-life insurers seen holding up better than life peers
Industry profitability is expected to be muted due to market conditions, Emkay said in a report. It said the nearly 14% decline in the Nifty 50 during Q4 and a 40-basis point rise in bond yields weighed 4-5% negative economic variance for private life insurers and 1% negative for Life Insurance Corp (LIC)-the biggest local institutional holder of stock.
The annualised premium equivalent (APE) in FY26 at life insurers would expand in high single digits. This slowdown in life insurance demand is partly driven by equity market volatility and rising yield expectations, which have dampened demand for ULIPs and non-par guaranteed products.
However, Axis Max Life is expected to lead followed by Life Insurance Corporation of India.
HDFC Life is expected to report single-digit APE growth, with traction balanced across savings products, while value of new business (VNB) margins are likely to remain stable at around 24.5%. ICICI Prudential Life may see higher single-digit growth, with VNB margins at about 24%.
SBI Life is likely to report high single-digit APE growth in the quarter, with FY26 APE growth estimated at around 14% year-on-year, impacted by a slowdown in ULIP sales toward the latter half of March amid volatile equity markets. Its VNB margins are expected to remain stable at around 27%. LIC is likely to report a relatively stronger 13% growth, aided by group business, with VNB margins around 20% as it continues to pivot toward non-participating products.
In contrast, general and standalone health insurers are expected to deliver robust growth. ICICI Lombard General Insurance is likely to report 10-12% growth in gross written premium, supported by motor and health segments, although commercial lines may see a slowdown. Its combined ratio is expected to remain broadly flat at around 102.6%, weighed down by higher expense ratios. Star Health and Allied Insurance is expected to post strong double-digit growth, aided by improved affordability following GST rate changes and normalisation of earlier regulatory impacts. Both claims and combined ratios are likely to improve.
Business
Edwards Lifesciences CVP Lippis sells $82,522 in stock

Edwards Lifesciences CVP Lippis sells $82,522 in stock
Business
Americans want weight-loss pills for cost and convenience

Americans want weight-loss pills for cost and convenience
Business
Employment Report: 178K Jobs Added In March, Better Than Expected
Lacheev/iStock via Getty Images

By Jennifer Nash
The latest employment report showed that 178,000 jobs were added in March, up from February’s 133,000 loss. This figure was better than the projected addition of 65,000 jobs and marks the largest gain since
Business
Aventuur’s Perth Surf Park breaks ground
The long-awaited $120 million Perth Surf Park has been at least 10 years in the making.
Business
Passport to funds: why CommBank is changing ID rules
One of Australia’s biggest banks will no longer require several identity documents every time you open an account after a technology change.
Business
Grewal Harpreet, Penumbra director, sells $32,822 in stock

Grewal Harpreet, Penumbra director, sells $32,822 in stock
Business
Form 13G Sifco Industries For: 6 April

Form 13G Sifco Industries For: 6 April
Business
KWEB: Legacy Businesses Take Time To Phase-Out
KWEB: Legacy Businesses Take Time To Phase-Out
-
NewsBeat4 days agoSteven Gerrard disagrees with Gary Neville over ‘shock’ Chelsea and Arsenal claim | Football
-
Business4 days agoNo Jackpot Winner and $194 Million Prize Rolls Over
-
Fashion3 days agoWeekend Open Thread: Spanx – Corporette.com
-
Crypto World5 days agoGold Price Prediction: Worst Month in 17 Years fo Save Haven Rock
-
Business1 day agoThree Gulf funds agree to back Paramount’s $81 billion takeover of Warner, WSJ reports
-
Crypto World7 days ago
Dems press CFTC, ethics board on prediction-market insider trades
-
Sports2 days agoIndia men’s 4x400m and mixed 4x100m relay teams register big progress | Other Sports News
-
Business5 days agoLogin and Checkout Issues Spark Merchant Frustration
-
Tech7 days agoEE TV is using AI to help you find something to watch
-
Sports6 days agoTallest college basketball player ever, standing at 7-foot-9, entering transfer portal
-
Tech7 days ago
Daily Deal: StackSkills Premium Annual Pass
-
Tech7 days agoFlipsnack and the shift toward motion-first business content with living visuals
-
Tech7 days agoHow to back up your iPhone & iPad to your Mac before something goes wrong
-
Crypto World7 days ago
Valinor raises $25m to put private credit on-chain
-
Tech7 days agoWhat Are The Biggest Limitations Of Supercomputers?
-
Crypto World6 days agoBitcoin enters the public bond market as Moody’s gives a first-of-its-kind crypto deal a rating
-
Politics7 days agoTransform Your Space with Stunning Small Works
-
Politics7 days ago‘Out of touch, smug and overpaid’
-
Politics6 days agoStarmer’s centre has collapsed, and the left was right all along
-
Crypto World6 days ago
Bitcoin stalls below key resistance as technical signals skew bearish

You must be logged in to post a comment Login