Britain could be entering one of its most severe periods of job losses in more than a decade, as rising costs, weak demand and global instability combine to place mounting pressure on employers.
New figures obtained via a Freedom of Information request to the Insolvency Service show redundancies across the UK have risen by 45 per cent since 2021, underlining a sustained increase in workforce reductions.
Richard Hunt, director at Liquidation Centre, warned that up to 327,000 workers could lose their jobs in 2026, a level of job losses that would approach those seen during the 2009 financial crisis.
The warning comes after 736 employers filed redundancy notices in the first two months of this year alone, affecting more than 56,000 roles. That represents an 8.5 per cent rise on the same period last year, while 2025’s total of 315,605 potential redundancies was already the highest since the pandemic.
Concerns are now growing that the economic impact of the Iran conflict could further intensify the downturn, particularly through higher energy costs and disrupted trade routes.
Pat McFadden, the Work and Pensions Secretary, told Sky News that the situation could have direct consequences for employment. He said the economy had previously been “going in the right direction” but warned that the war in Iran had created significant uncertainty.
“There is likely to be an effect on prices, which feeds through from energy costs, and there may well be labour market implications,” he said, adding when pressed on job losses: “Yes. It could happen.”
A key concern for businesses is the Strait of Hormuz, a critical shipping route through which around a fifth of global oil supplies pass, with any disruption potentially feeding into higher fuel and energy costs.
Businesses are already contending with a range of pressures, including rising operating costs, weaker consumer demand, wage inflation and policy changes affecting taxation and employment costs.
Critics have pointed in particular to Chancellor Rachel Reeves’ tax policies, including increases to employer National Insurance and business rates, which they argue are adding further strain to sectors such as hospitality and retail. Industry figures have warned of accelerating closures on the high street.
Several well-known businesses, including TGI Fridays, Claire’s and Russell & Bromley, entered administration in January, reflecting what analysts describe as a broader squeeze on margins across consumer-facing industries.
Mr Hunt said firms are now increasingly turning to automation and artificial intelligence to cut costs and preserve viability, as multiple pressures hit simultaneously rather than in isolation.
Last year, redundancy payouts reached £478 million, highlighting the scale of restructuring already underway. The projected 327,000 job losses for 2026 would exceed last year’s estimated total by more than 11,000 roles.
With energy prices volatile and global uncertainty rising, economists warn that the outlook for employment remains increasingly fragile.