UK Unemployment Rate Increases to 5.1%, Young Workers Hit Hardest
The UK's unemployment rate has risen to 5.1% in the three months to October, according to official data. This marks a slight increase from 5% in the previous three-month period. The Office for National Statistics (ONS) attributes this to a "subdued labour market" and a "weakening labour market" as indicated by falling payroll numbers and rising unemployment, particularly among younger age groups.
Average wage growth, excluding bonuses, was 4.6% between August and October 2025, with annual average earnings growth slowing from 4.2% to 3.9%. However, private sector wage growth accelerated from 6.6% to 7.6%, while public sector growth remained at 4.6%.
Liz McKeown, ONS director of economic statistics, noted that the figures indicate a "weakening labour market" and a "subdued hiring activity" with a fall in payroll numbers. James Reed, CEO of Reed Recruitment, echoed this sentiment, stating that all main labour market measures are "going in the wrong direction."
The government's plans to scrap the two-tier minimum wage and create a new rate for all adults have been met with criticism from businesses, who argue that this will discourage hiring young workers with little or no experience. This is supported by the case of Meerah Nakaayi, a 22-year-old from London who has been out of work since June after completing a two-year apprenticeship and two years of work in the sector.
Yael Selfin, chief economist at KPMG UK, predicts weak prospects for a rebound in hiring activity for younger workers, attributing this to a "marked slowdown in hiring activity amongst businesses."
The government's response includes investing £1.5 billion to deliver 50,000 apprenticeships and 350,000 new workplace opportunities for young people, as well as an investigation into the issue of young people's inactivity and work, led by Alan Milburn.
However, Helen Whately, shadow work and pensions secretary, accused the government of implementing "growth-killing policies" that will lead to job losses in the run-up to Christmas, affecting thousands of families during the holiday season and into the New Year.
