British jobs could face mounting pressure if instability in the Middle East continues to fuel rising costs and weaken business confidence, according to an insolvency expert.
The warning follows the latest Office for National Statistics figures showing UK unemployment unexpectedly rising to 5%, while job vacancies have fallen to their lowest level in five years.
Economists say businesses are already responding to rising labour costs, weaker consumer confidence and economic uncertainty linked to the Iran conflict and higher oil prices.
Molly Monks (main picture), an insolvency specialist at Parker Walsh, warned that some sectors are far more exposed during periods of geopolitical and economic instability.
VULNERABLE SECTORS
Hospitality businesses were identified as one of the most vulnerable sectors, with rising energy, transport and food costs putting additional strain on already tight margins.
Retail workers could also face growing uncertainty as households cut discretionary spending amid cost-of-living pressures.
Transport and logistics firms are expected to come under pressure from higher fuel prices, while manufacturing businesses may struggle with increased energy costs and supply chain disruption.
The travel and aviation sector was also highlighted as vulnerable if oil prices continue climbing over the coming months.
HIRING FREEZES
Monks says: “When businesses face rising costs and uncertainty, recruitment is often one of the first things to slow. Unfortunately, certain industries tend to feel that pressure much faster than others.”
On hospitality, she adds: “Hospitality businesses already operate on relatively tight margins. When energy prices rise and consumer confidence weakens at the same time, staffing levels often come under pressure very quickly.”
She warns that reduced opening hours, hiring freezes and fewer seasonal roles could become more common during the summer if costs continue increasing.
Discussing retail, Monks says: “When people feel financially anxious, discretionary spending is usually one of the first things to fall. Retailers then face lower footfall alongside rising operating costs, which creates a difficult combination.”
She says smaller retailers and independent chains are often particularly exposed during economic downturns.
FUEL COSTS
And she adds: “Fuel costs feed into almost every part of the economy, but logistics companies feel the impact particularly quickly. Higher transport costs can lead to businesses cutting routes, delaying expansion plans or reducing recruitment.
“What we’re seeing is businesses becoming much more defensive. Many firms are delaying recruitment decisions, limiting pay rises or reassessing growth plans until the economic picture becomes clearer.”
“If instability continues over the coming months, pressure on the labour market could intensify further.”
