# UK set to shed 163,000 jobs amid Iran war fallout – report

By Susannah Streeter — 2026-05-11

Susannah Streeter, chief investment strategist at Wealth Club, said: “With the political dust settling on another weekend of upheaval for British politics, the Prime Minister Keir Starmer is attempting to draw a shaky line under his party’s losses.

“He’s aiming for a reset in a speech which is expected to focus on his efforts to tackle Britain’s big challenges.

“The problem is, the war in the Middle East has made this even harder, given the fresh inflationary challenges it has thrown up, which are constraining the government’s spending power.

“Now, a closely watched economic forecast from the EY Item Club is forecasting that 163,000 jobs are likely to be lost this year, with manufacturing, construction and retail hit particularly hard by the fallout from the war.

“Energy-hungry industries such as manufacturing and construction are expected to be particularly badly hit due to rising costs, while retail, accommodation and hospitality are expected to suffer as household incomes are battered by rising bills.

“Amid this outlook, it’s going to be hard for the government to cut through and deliver policies which will make an immediate difference to households.

“However arguably many of Keir Starmer’s problems lie with perception and his powers of political persuasion, and it may be hard to teach given that old habits die hard.”

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