Business lobby group the CBI has warned UK's jobless total will jump to two million - but separate data suggests firms are gearing up for hiring spree08:36, 09 Jun 2026Updated 08:41, 09 Jun 2026The number of people out of work is forecast to surge by 200,000 this year - fuelled by the Iran war’s economic shock.‌Business lobby group the Confederation of British Industry (CBI) warned the UK’s unemployment rate could peak at an 11-year high of 5.5%, up sharply from the 5% it predicted in December. The surge would leave around two million people looking for work.‌Economists from the CBI said the weakening labour market is linked to reduced business investment in the face of higher cost inflation and concerns over consumer spending. It predicted that unemployment will then reduce to around 5.3% for 2027.‌It came as the organisation downgraded its growth forecasts for the UK economy over the next two years.The CBI now reckons gross domestic product - the value of everything the UK churns out - will slow from 1.4% growth last year to 1.1% in 2026 and then 0.9% in 2027. Previously, it had pointed towards growth of 1.3% this year and 1.5% in 2027.‌The revision is largely caused by the impact of the conflict in the Middle East, which has seen inflation rise. Higher global energy prices, disrupted supply chains, and increased uncertainty for businesses and consumers are all set to weigh on growth.Louise Hellem, chief economist at the CBI, said: “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.“Last year it was tariffs and this year it’s the conflict in the Middle East.”The projections also indicated that inflation is likely to increase “towards 4%” by the end of this year, as higher energy costs feed through to firms and households.‌UK consumer prices index (CPI) inflation was most recently recorded at 2.8% in April but is expected to accelerate in the coming months.The CBI said it expects the Bank of England to maintain interest rates at their current level of 3.75% for the rest of this year.The gloomy forecasts on the jobs market contrasts with separate data out today suggesting a surge in hirings later this year.‌A survey by recruitment giant ManpowerGroup found 37% of businesses were planning to recruit, up 10 percentage points quarter-on-quarter and 18 percentage points year-on-year.Michael Stull, UK managing director at ManpowerGroup UK, said: “UK businesses are realising the need for people. Uncertainty has dominated the UK economy and job market for months, but that is not sustainable for businesses, employees or the consumer. That’s why we are seeing the needle shifting in terms of a willingness to hire.”The increase in hiring intentions is being across the board in terms of industries, Manpower added.Article continues belowThe North West recorded the strongest outlook at 48% – the highest in the country - followed by the North East, at 46%.