Young people bearing brunt of UK jobs downturn, thinktank warns | UK unemployment and employment statistics
Young people are bearing the brunt of Britain’s employment crisis, according to a report, ahead of official figures this week expected to show the UK unemployment rate rising to 5.1%.
The Solution Foundation think tank said the “job gap” was pushing a growing number of graduates and non-graduates into unemployment as employers cut back on hiring.
City economists expect the unemployment rate to rise to 5.1% in October from 5% in September, according to an update from the Office for National Statistics on Tuesday.
In a week full of economic news, this will be followed by the latest UK inflation reading on Wednesday and the interest rate decision on Thursday.
Çözüm Foundation said that many people left their jobs due to health problems during the Covid epidemic, but the recent trend shows that job seekers are hindered due to cuts in the public and private sectors.
Nye Cominetti, chief economist at the think tank, said: “The public debate in recent years has centered around an ‘inactivity crisis’ driven by poor health and disability. “But while the rise in health-related inactivity is a big problem, rising unemployment is the forgotten driver of Britain’s current employment downturn.
“Young people once again find themselves at the center of this downturn, just as they did in the wake of the financial crisis and Covid. Policymakers and employers need to redouble efforts to support them.”
While the Bank of England and the Treasury’s independent forecaster, the Office for Budget Responsibility, think unemployment has peaked, many economic forecasters suggest unemployment could reach 5.5% next year as companies cut back due to higher taxes, low consumer confidence and slow growth.
The job market forecast will be followed by an update on inflation, which is expected to fall from 3.6% to 3.5% in November.
While that decline is modest, it is likely to persuade a majority of the Bank of England’s monetary policy committee (MPC) to cut interest rates from 4% to 3.75%, according to a Reuters poll of City economists.
On Thursday, the Bank’s governor, Andrew Bailey, is expected to join forces with four members of the nine-member MPC who voted to cut borrowing costs at the previous meeting.
Bailey, who voted to keep interest rates steady at the last meeting, has shown in his speeches and public discussions that he is concerned about the slowing economy and rising unemployment.
Ruth Gregory, deputy head of UK economist at consultancy Capital Economics, said the economy was struggling to grow. “It is remarkable that the economy has grown in only one of the last seven months,” he said, adding that October’s 0.1% contraction left the economy no larger than it was in April.
Çözüm Foundation blamed the weak economy for most of the increase in unemployment.
Ministers are increasingly alarmed about the youth employment market as the number of young people aged 16 to 24 who are not in education, employment or training (Neet) reaches almost one million.
A report by consultants PWC last week showed that the UK has fallen in international rankings for youth employment, falling four places to 27th out of 38 members of the Organization for Economic Co-operation and Development.
The Resolution Foundation’s estimate of the working-age employment rate in the UK fell by one percentage point from October 2020 to September 2025, equating to 415,0000 workers.
“The decline in employment in both the last 12 months and the last five years is due entirely to high unemployment, not to increasing economic inactivity as many people assume, and young people are bearing the brunt of Britain’s employment crisis,” the report said.
According to the latest figures, the participation rate (or the share of people working or looking for work) was at 79.5%, above the pre-pandemic level of 79.2% and close to the record high of 79.9% in 2023.
