“Mild zombie apocalypse” hits UK jobs market—with the young most likely to be bitten
As struggling firms finally collapse under higher rates and costs, vacancies dry up, wages stall and a generation of workers is left chasing fewer and fewer jobs
Britain’s economy is facing what one influential think-tank has bizarrely called a “mild zombie apocalypse”—but for jobseekers, the gruesome metaphor isn’t quirky journalism fodder, it’s a stark warning of rising unemployment, stagnating wages and dwindling opportunities as 2026 dawns.
The phrase zombie apocalypse might conjure images of shambling corpses and dramatic chase scenes, but in economic terms, it describes the long-predicted collapse of unproductive companies that have been kept alive by a decade of low interest rates and cheap credit.
The Resolution Foundation argues that a “triple whammy” of higher interest rates, soaring energy costs and an increased minimum wage is finally finishing off these “zombie firms”—businesses that should have died years ago but survived through artificial support.
Trouble is, while economists like the idea of creative destruction (where inefficient firms die to make way for productive ones), the real-world result for workers is far less encouraging. The closures of these struggling companies mean fewer jobs, not more. Tougher trading conditions have already pushed unemployment up to around 5 per cent, the highest level outside the COVID-19 pandemic in a decade—and that’s before 2026 has even begun.
And that’s not even taking into account the elephant in the room: the “Godfather of AI”, Geoffrey Hinton, predicts that 2026 will bring many job losses due to AI.
Jobseekers left out in the cold
For people looking for work—especially younger jobseekers—this economic transition feels like walking into a job centre with a bucket and spade to find the quarry empty.
Despite official spin that the labour market is resilient, the reality is that the employment rate is falling, not rising, and the drop is entirely due to rising unemployment, not more people opting out of work. That means there simply aren’t enough jobs to go around.
Young people are bearing the brunt. Recent estimates suggest that the jobless rate for 18- to 34-year-olds sits significantly higher than the national average, with almost one million young adults not in employment, education or training. That’s a generation starting life with fewer prospects, fewer skills on their CVs and a growing sense that economic growth simply isn’t delivering for them.
Real wages are flat
Even those lucky enough to hold down work are feeling the chill. Real wage growth has flatlined while the cost of living continues its inexorable climb. With average pay packets rising only inches while bills surge, take-home incomes are effectively shrinking for many—leaving jobseekers with even less bargaining power and existing workers reluctant to leave stable roles for uncertain prospects.
This isn’t just a short-term blip. Analysis forecasts that household incomes will barely grow in 2026 and might slow to a crawl—a scenario that hasn’t been seen outside major economic shocks like Brexit or the pandemic.
Policy promises vs. reality
Government ministers have been keen to point to achievements like recent reductions in child poverty, but such victories are fleeting amid deteriorating job prospects. The deeper structural issues—fewer working-age people due to demographic shifts, slower productivity growth, and a lack of new jobs being created—remain unresolved.
For jobseekers across the UK, the end of 2025 and start of 2026 feels less like the start of a new year and more like the start of a long winter: fewer jobs, stagnating wages, and an unforgiving economic landscape. The think-tank’s “zombie apocalypse” might sound like a catchy metaphor, but it’s a grim reality with real human costs.