Collapse of ‘zombie’ UK firms forecast to fuel unemployment in 2026

Business leaders said increases in tax and living wage rates had deterred employers from taking on staff Photograph: Bloomberg/Getty Images

The UK is poised for a rise in unemployment in 2026 fuelled by the collapse of “zombie” companies that have struggled to adapt to a rise in business costs, according to a report.

At the start of what could be a pivotal year for the economy, the Resolution Foundation said businesses were grappling with a “triple whammy” of multiyear increases in interest rates, energy prices and the minimum wage that could “finish off” some underperforming companies.