UK unemployment rate hits near five-year high as wage growth slows
1.
'All my friends are talking about is the job search'
Published at 09:12 GMT
Hannah Mullane
Business reporter
Image source, Lucy Gabb
Lucy Gabb, a recent graduate from Cambridge University with a degree in French, is struggling to find employment. She has applied for over 50 graduate and entry-level roles, securing only one face-to-face interview. Most of the time, she receives no response or a swift rejection.
"The application process is lengthy, making it challenging to balance with full-time work and relevant work experience," she explains.
Her friends are also grappling with job searches, which can be demoralizing after years of study.
2.
Workers are 'paying the price for government failures' - Lib Dems
Published at 09:08 GMT
Image source, PA Media
Daisy Cooper, the Liberal Democrat Treasury spokesperson, criticizes the government's failures, arguing that workers are bearing the brunt. She highlights the 'damaging jobs tax' and the 'betrayal on business rates,' causing small and high streets to struggle.
The Lib Dems propose an 'emergency VAT cut for hospitality' until April 2027 to stimulate job creation.
3.
Uncertainty can lead employers to sit on their hands
Published at 09:05 GMT
Simon Jack
Business editor
The job market remains weak, with employers hesitant to hire due to various factors from the previous year, including increased National Insurance contributions, the National Living Wage, and uncertainty surrounding the Employment Rights Act. A late budget further exacerbates the situation.
Despite a slight thaw in the hiring freeze, the employment market is still considered weak, with significant employment declines in retail and hospitality, sectors employing many young people and those near the National Living Wage.
4.
What does 'unemployment' actually mean?
Published at 08:47 GMT
Unemployment is not merely about anyone without a job. The Office for National Statistics (ONS) defines it as individuals without work, available for work, and actively seeking employment.
To be considered unemployed, one must have actively looked for work in the last four weeks and be ready to start within the next two.
Those not meeting these criteria are classified as 'economically inactive,' which includes students, retirees, and individuals with long-term illnesses or disabilities.
5.
Unemployment for 18-24-year-olds reaches 14% - the highest since 2020
Published at 08:31 GMT
The unemployment rate for 18-24-year-olds in the UK has surged to 14%, the highest since 2020, according to the ONS data.
This represents a 0.3 percentage point increase from the three months to November, which saw a 13.7% unemployment rate among 18-24-year-olds.
The last time the UK witnessed such a high unemployment rate for this age group was in 2015, aside from a brief period during the pandemic in 2020.
6.
These figures could lead the Bank of England to decide it will cut interest rates
Published at 08:24 GMT
Theo Leggett
International business correspondent
The slow economic growth in the latter half of last year and the late November budget contributed to weak hiring activity, as described by the ONS. The number of people on company payrolls decreased by 130,000 over the year, while more job seekers entered the market, pushing the unemployment rate to a near five-year high.
Average pay grew by 4.2%, down from 4.4% in the previous survey, with public sector wages outpacing those in the private sector.
Economists predict that these figures will reinforce the expectation of falling inflation, prompting the Bank of England to cut interest rates soon, possibly at its next meeting in March.
7.
Youth unemployment 'very high and concerning', recruiter says
Published at 08:09 GMT
Michael Stull, the managing director of ManpowerGroup UK, describes the latest youth unemployment figures as 'very high and concerning.'
He attributes the tough end to the year to market uncertainty, which hiring managers and workers alike dislike. This uncertainty has led to a decrease in hiring.
Employers aim to expand their workforce but require more market confidence after a period of instability.
8.
We want to hear from you
Published at 08:02 GMT
Are you seeking employment or has your company reduced hiring? Reach out via:
- Email: yourvoice@bbc.co.uk
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- Tag us on X: @BBC_HaveYourSay
9.
Minister: We know there's more to do - tackling youth unemployment is a key priority
Published at 07:57 GMT
Pat McFadden, the Work and Pensions Secretary, acknowledges the challenge of youth unemployment, noting a 381,000 increase in employment since the start of 2025.
The government's £1.5 billion initiative to address youth unemployment is a priority, with plans to simplify apprenticeship processes for young people and create 50,000 new apprenticeships.
10.
Tories blame Labour for increasing taxes and 'red tape'
Published at 07:53 GMT
Mel Stride, the Conservative shadow chancellor, criticizes Labour, stating that higher taxes, including a jobs tax, soaring business rates, and anti-business red tape, are hindering employment.
He believes Labour's lack of real-world business experience is evident in their policies.
11.
12.
Data shows weak hiring activity while more people look for jobs - ONS
Published at 07:44 GMT
Liz McKeown, the director of economic statistics at the ONS, highlights weak hiring activity and an increase in job seekers. The number of unfilled jobs has stabilized since mid-2024, leading to a higher number of unemployed individuals per vacancy, a post-pandemic record.
Redundancies are on the rise, and private sector wage growth is slowing, while public sector pay growth remains elevated.
13.
UK unemployment close to five-year high, ONS figures show
Published at 07:39 GMT
The UK's unemployment rate reached a near five-year high of 5.2% in the last three months of 2025, according to official data.
This represents a 0.1 percentage point increase from the 5.1% recorded in the three months to November.
Average annual pay grew by 4.2%, with the public sector at 7.2% and the private sector at 3.4%.
The ONS attributes the figures to 'weak hiring activity,' influenced by the Chancellor's 2024 Budget, which raised employer National Insurance contributions and the minimum wage, prompting businesses to slow hiring and replace outgoing workers.
