According to the Office for National Statistics, the number of people on company payrolls fell by 130,000 in the year to December 2025. Unemployment rose to its highest rate for nearly five years – 5.2 per cent for those aged 16 and over, based on data for October to December 2025.
But it is young people who are really suffering. Unemployment among people aged 16-24 rose to 16.1 per cent at the end of 2025 – the highest for over a decade.
Officially, unemployment does not mean anyone without a job. To be counted you have to be without work, available for work and seeking work. Otherwise you are just “economically inactive”.
High unemployment usually brings a fall in inflation, as employers take advantage of available workers. And indeed the rate of inflation has come down slightly, to 3 percent from 3.4 per cent last December.
But the cost of essential foods remains high. And despite widespread pay struggles wages for many workers have not kept up with price increases.