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flag UK unemployment rose to 5.1% in 2025 due to AI job cuts, rising wages, and U.S. tariffs, despite modest GDP growth.

flag The UK economy faced headwinds in 2025, with unemployment rising to 5.1%—its highest level in over four years—driven by rising wages, AI-driven job cuts like Amazon’s global reductions, and a 10% U.S. tariff on most UK goods imposed in April. flag While trade deals with the U.S. helped stabilize growth, boosting the GDP forecast to 1.5%, uncertainty over the November Budget and expired low-rate deals dampened business and consumer confidence, leading to flat fourth-quarter growth. flag Analysts remain divided on 2026 prospects, with cautious outlooks amid weak spending and ongoing fiscal uncertainty.

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