OBR raises forecast from 4.9% and downgrades UK’s growth prospects for 2026 – while also warning of war uncertainty

Unemployment in the UK is set to peak this year at a higher rate than previously estimated, with a “worrying” increase in young people being out of work, the government’s official forecaster has said.

The Office for Budget Responsibility (OBR) said unemployment will peak at 5.3% this year, up from its previous forecast in November of 4.9%.