The rising unemployment rate, coupled with a noticeable slowdown in wage growth, presents a challenge for the Labour government. Although efforts are underway to tackle youth unemployment and support job creation, the recent data suggests that the UK\u2019s economic recovery remains fragile, with further hurdles ahead.<\/p>\n\n\n\n
According to the latest ONS data, the unemployment rate for the three months leading up to October 2025<\/strong> reached 5.1%, up from 5% in September. This marks the highest level since the first quarter of 2021, and the highest since 2016 <\/strong>if the COVID-19 pandemic period is excluded. The number of employees on payrolls also decreased by 22,000 in September, with an additional drop of 38,000<\/strong> estimated for November, indicating a weak labour market.<\/p>\n\n\n\n The decline in job vacancies has been another key factor. In the three months to November, vacancy numbers fell by around 77,000 <\/strong>compared to the previous year, a clear sign of reduced hiring activity. Liz McKeown<\/strong>, director of economic statistics at the ONS<\/a>, highlighted that businesses are responding to lower demand and rising costs by curtailing recruitment. This has been particularly hard on younger workers<\/strong>, who have seen fewer job opportunities, further deepening concerns over long-term youth unemployment.<\/p>\n\n\n\n The recent figures reflect a broader trend of economic instability. “The overall picture continues to be of a weakening labour market<\/em>,” McKeown said, adding that businesses are reporting fewer jobs available. Analysts suggest that the combination of higher national insurance contributions and the increase in the National Living Wage has made hiring more expensive for employers, prompting many to slow down recruitment or reduce staff numbers.<\/p>\n\n\n\nLabour’s Response and Economic Challenges Ahead<\/h2>\n\n\n\n