The UK economy is bracing for a downturn, with the Confederation of British Industry (CBI) projecting that unemployment could rise to 5.5%, affecting about two million individuals. This forecast reflects an increase of 200,000 unemployed Britons amid escalating energy costs and the ongoing conflict in the Middle East. The current unemployment rate stands at 5%, approximately 1.8 million people. The CBI has also revised its growth projections downward, expecting GDP growth to slow from 1.4% last year to 1.1% in 2026 and further to 0.9% in 2027. This shift is attributed to reduced business investment due to high inflation and concerns about consumer spending. Louise Hellem, the CBI's chief economist, noted that global disruptions are compounding the UK's economic woes, which could have been more favorable without these shocks. Inflation is anticipated to rise towards 4% by year-end, reflecting the impact of increased energy prices on households and businesses. The Bank of England is expected to keep interest rates steady at 3.75% for the rest of the year.