UK Businesses Warn of Job Losses and Economic Problems

Many UK businesses are warning about tough times ahead. They are concerned about people losing jobs, the high cost of sickness at work, and rich people leaving the country. This could lead to a difficult economic period.
By Newsroom | Business, Economy |

A Grim Outlook Emerges

Recent statements from prominent business leaders paint a worrying picture of the UK's economic future. Warnings abound regarding a potential rise in joblessness, significant costs linked to workplace sickness, and a general sense of the nation "sleepwalking" into an avoidable crisis. These concerns are amplified by instances of major retailers announcing job cuts and a significant outflow of wealthy individuals, further fuelling anxieties about economic decline and the health of high streets.

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The Sickness Bill and Workforce Participation

A major review into workplace sickness has highlighted a substantial financial burden on the UK, estimated at £85 billion. This figure underscores a growing problem of people being unable to work due to ill health.

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  • Efforts are being made to address this issue, including a three-year focus on mental health at work, retaining older workers, and improving the participation and retention of disabled people.

  • A partnership involving over 60 major employers, including Tesco and John Lewis, aims to test new health and wellbeing initiatives to reduce sickness absence and improve return-to-work rates.

  • However, some business groups have expressed concerns that elements of the proposed Labour's Employment Rights Bill, such as guaranteed hours and restrictions on zero-hours contracts, might make businesses hesitant to hire individuals with existing health conditions.

  • The role of GPs in assessing a worker's ability to return to modified roles is also under scrutiny, as they reportedly face pressure to issue sick notes.

Retail Sector Struggles and Job Reductions

The retail industry is facing considerable pressure, with major players announcing significant job cuts and operational changes.

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  • Tesco is set to cut 400 jobs across its stores and head office, affecting bakeries, mobile phone shops, and management structures.

  • This follows a similar move by rival Sainsbury's, which announced 3,000 job cuts alongside the closure of its cafés and pizza counters.

  • Concerns have been raised for years about the impact of online retail on high street businesses.

  • A call has been made to overhaul business rates, as they are seen as unfair to companies trading from physical stores compared to online retailers. The burden of these rates has remained high while sales from brick-and-mortar stores have declined.

Exiting Wealth and Investment Concerns

There is a discernible trend of wealthy individuals leaving the UK, a phenomenon that carries significant implications for investment and job creation.

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  • Reports suggest the UK is experiencing the largest millionaire exodus globally.

  • Critics argue that current policies and a lack of new incentives are failing to persuade high-net-worth individuals to remain in or return to the UK.

  • Countries like Italy, the UAE, and Singapore are reportedly actively attracting wealthy individuals with favourable policies, while the UK is seen as becoming less welcoming.

  • This outflow of wealth is anticipated to affect investment flows, job creation, philanthropy, asset markets, and the overall tax base.

Broader Economic Worries and Potential Crisis

Beyond specific sectors, there are widespread concerns about the UK's overall economic trajectory.

Read More: UK Economy Grows Very Slowly at End of 2025

  • Warnings have been issued about the UK "sliding into an economic crisis," partly due to the high costs associated with workplace sickness.

  • There is apprehension that the UK is "sleepwalking into mass unemployment," particularly as support schemes, like the furlough scheme, wind down.

  • Some analysis suggests a peak unemployment rate of 7.5% might be reached, which could impede the nation's economic recovery.

  • Discussions around potential business taxes and the upcoming Budget are causing some households to potentially delay spending.

Expert Voices and Observations

Business leaders have been vocal in their warnings.

"Ministers must act to save tens of thousands of jobs on UK's struggling high streets."— Dave Lewis, former Tesco chief executive

"The UK is facing the largest millionaire exodus in the world this year, yet the government appears unwilling—or unable—to do anything meaningful to stop it."— Nigel Green, CEO of a major independent financial advisory organisation

"Are you out of work due to ill health? … Retailers understand the importance of supportive workplaces."— Helen Dickinson, Chief Executive of the British Retail Consortium

Unanswered Questions and Future Considerations

The current evidence points to several interconnected challenges impacting the UK's economic stability and employment landscape. The extent to which proposed governmental and business-led initiatives will mitigate these risks remains to be seen.

Read More: UK Economy Grew Very Little at End of 2025

  • Will the planned health and wellbeing initiatives effectively reduce sickness absence and improve return-to-work rates?

  • How will the proposed changes in employment law affect businesses' willingness to hire individuals with existing health conditions?

  • Can the retail sector adapt to changing consumer habits and economic pressures without further significant job losses?

  • What measures, if any, will be implemented to counter the outflow of wealthy individuals and the potential impact on investment?

Sources

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Frequently Asked Questions

Q: Why are businesses worried about the UK economy?
They are worried about people losing jobs, the high cost of sickness at work, and rich people leaving the UK.
Q: How much does sickness at work cost the UK?
Sickness at work costs the UK about £85 billion.
Q: Are big shops cutting jobs?
Yes, shops like Tesco and Sainsbury's are cutting hundreds or thousands of jobs.
Q: Are rich people leaving the UK?
Yes, reports say many rich people are leaving the UK, which could hurt investment.