The UK unemployment rate rose to 5.1% in the three months to October, with younger workers particularly affected, official data shows. This is up from 4.3% at the same time last year, illustrating a continuing trend of more people out of work, according to the Office for National Statistics (ONS).
The number of unemployed 18 to 24-year-olds increased by 85,000 over the period, the largest rise since November 2022. The ONS said the figures reflected a “subdued labour market” that is having a disproportionate impact on young people.
Many employers held off on hiring ahead of the Budget, waiting to see Chancellor Rachel Reeves’s plans for taxation and spending. The effects of last year’s national insurance increase, which made hiring more expensive, are still being felt. Estimates show the number of employees on company payrolls fell by 149,000, or 0.5%, in October compared with the previous year.
Liz McKeown, ONS director of economic statistics, said the figures indicate a “weakening labour market,” with young people particularly affected by declining payroll numbers and rising unemployment. The government has pledged to launch an investigation into youth unemployment and inactivity.
For 22-year-old Meerah Nakaayi from London, the figures are personal. After completing a two-year apprenticeship in policy and working in the sector for two years, she has been unemployed since June. “The last six months have been incredibly frustrating and demotivating,” she said. Nakaayi highlighted the intense competition, noting her last interview received 290 applications for a niche policy analyst role.
James Reed, chief executive of Reed Recruitment, told BBC Radio 4’s Today programme that “the economics of hiring at entry level is becoming less and less appealing to employers.” The government plans to scrap the two-tier minimum wage and introduce a single adult rate, but many businesses warn this could discourage hiring inexperienced young workers.
Kris Gumbrell, chief executive of the Brewhouse and Kitchen pub chain, said the hospitality industry feels “punished” by government policy. He cited a recent job advert for a front-of-house role that attracted 200 applications in hours. “It’s young people that have suffered the most,” he said, adding that the government’s new apprenticeship plans do not suit the sector.
Wage growth remains above inflation but is slowing in the private sector. Between August and October 2025, average wages, excluding bonuses, rose 4.6%. Private sector earnings growth slowed from 4.2% to 3.9%, while public sector pay increased from 6.6% to 7.6%.
The Bank of England is due to decide on interest rates this week. Yael Selfin, chief economist at KPMG UK, said the weak labour market could justify a rate cut, although inflation remains almost double the Bank’s 2% target.
Responding to the ONS data, Secretary of State for Work and Pensions Pat McFadden said the figures “underline the scale of the challenge we’ve inherited.” He cited £1.5bn in funding to deliver apprenticeships and workplace opportunities for young people. Shadow Work and Pensions Secretary Helen Whately accused the government of policies that risk “job losses in the run up to Christmas,” warning that higher unemployment for 14 consecutive months is leaving families struggling.
