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Youth unemployment in the UK is expected to reach nearly 18% by next year, driven by the increasing adoption of artificial intelligence (AI) technologies that are impacting entry-level job opportunities. The British Chambers of Commerce (BCC) forecasts that the youth unemployment rate will rise to 16.9% in 2026, up from 16.1% in the last quarter of 2025, with a further increase to 17.88% anticipated by 2027.
The BCC attributes this trend to several factors, including rising labour costs, higher taxes, and the displacement of jobs by AI systems. This situation poses a significant concern, as it suggests that nearly one in five young people could be unemployed in the coming year.
In addition to the challenges facing young job seekers, overall business investment in the UK is projected to decline by 2.2% this year, reflecting broader economic pressures. The growth rate of average earnings is also expected to slow, decreasing from 3.7% in Q4 2026 to 3.3% by the end of 2027, as companies grapple with squeezed profit margins due to escalating input costs and minimum wage increases.
The ongoing conflict in the Middle East is further complicating the economic landscape, contributing to these negative forecasts and impacting business confidence.
Source: www.theguardian.com – https://www.theguardian.com/business/live/2026/jun/02/alphabet-80bn-share-sales-ai-spending-berkshire-hathaway-stock-markets-oil-interest-rates-inflation-latest-news-updates