Data released by the United Kingdom’s Office for National Statistics (ONS), last Tuesday, showed employers struggling with soaring energy costs after oil and gas prices jumped following the effective closure of the Strait of Hormuz during the US-Israeli military campaign against Iran.

This is further as, tax data showed the number of payrolled employees in Britain fell by 100,000 in April, after a revised decline of 28,000 in March, a drop far steeper than economists’ forecasts for a fall of 10,000.

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The ONS said the decline was the biggest since May 2020 at the start of the Covid-19 pandemic, particularly at the beginning of the tax year in April.

The figures added to evidence of a weakening labor market since the end of 2025, with the ONS revising down its estimates for the previous four months.

The agency’s director of economic statistics, Liz McKeown, said retail accounted for much of the fall, adding to signs businesses are scaling back hiring as economic uncertainty deepens.

Separate ONS data showed the unemployment rate in the UK rose to 5% in the three months to March from 4.9% previously, defying expectations for it to remain unchanged, while wage growth slowed.

Earlier this year, the International Monetary Fund (IMF) warned that the UK is “especially exposed” to the Middle East conflict because of its reliance on gas-fired power.

According to a recent Reuters estimate, the US-Israeli war on Iran has already cost global businesses at least $25 billion. European firms accounted for the largest share of downgraded forecasts as soaring energy prices and supply chain disruptions hit companies across the region. Many are based in the EU and Britain, where energy costs were already elevated after the bloc reduced Russian oil and gas imports following the escalation of the Ukraine conflict.