No feelgood factor for Reeves as Iran war snuffs out economic upturn
The ongoing Iran war has negatively impacted the UK economy, leading to a rise in unemployment and stagnant wage growth. Rachel Reeves, the Chancellor, had hoped for economic stability this year, but recent data indicates a setback. Households are feeling the strain as inflation rises and job numbers decline.
- ▪UK unemployment unexpectedly rose to 5% in March, marking a setback for economic recovery.
- ▪The number of payrolled jobs fell by 100,000 in April, the third-largest monthly decline since 2014.
- ▪Regular pay growth was at its weakest in over five years, with private sector wages increasing by just 3%.
- ▪The Bank of England's monetary policy committee may reconsider interest rate hikes due to the weak labor market.
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Rachel Reeves wanted to bring stability to the economy and public finances this year. Photograph: Ian Forsyth/Getty ImagesView image in fullscreenRachel Reeves wanted to bring stability to the economy and public finances this year. Photograph: Ian Forsyth/Getty ImagesEconomicsAnalysisNo feelgood factor for Reeves as Iran war snuffs out economic upturnHeather Stewart Economics editorRise in unemployment and weak pay growth underline how tough this year will be for UK households UK unemployment unexpectedly rises to 5% Business live – latest updates Tue 19 May 2026 03.07 EDTLast modified on Tue 19 May 2026 03.14 EDTShareNews that the UK unemployment rate jumped back to 5% in March appears to be the latest evidence that the Iran war has snuffed out the economic upturn Rachel Reeves had hoped…
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