UNEMPLOYMENT in the UK rose to its highest rate in nearly five years at the end of 2025, official figures show.
The unemployment rate climbed to 5.2% in the three months to December, from 5.1% in the three months to November, the Office for National Statistics (ONS) said.
But young people are bearing the brunt, with unemployment for those aged between 16 and 24 rising to 16.1%, its highest in more than 10 years.
Work and Pensions Secretary Pat McFadden said there was ‘more to do to get people into jobs’, with tackling youth unemployment a key government priority.
The Tories said Labour has overseen ‘an unprecedented series of monthly unemployment increases’ which were the ‘predictable result of bad decisions and economic incompetence’.
Former health secretary Alan Milburn claimed that young people are on a ‘downward escalator’ of poor health, poor education and graduating ‘into the benefit system’ as adults.
The ONS said its labour market figures reflect ‘weak hiring activity’, and also that more people who are out of work are now looking for jobs.
Economic statistics director Liz McKeown said: ‘The number of vacancies has remained broadly stable since the middle of last year.
‘Alongside rising unemployment this means that the number of unemployed people per vacancy has increased, reaching a new post-pandemic high.
‘Meanwhile, redundancies are also showing an upward trend.’
Paul Dales, chief UK economist at Capital Economics, said the further fall in wage growth ‘supports the idea that the Bank of England has at least a couple more interest rate cuts in its locker’.
The Bank uses interest rates as a tool to cool inflation, the rate at which prices rise, which is currently above the 2% target set for it by the government.
The slowdown in wage growth to 4.2% came despite inflation-busting pay awards for public sector workers, where average pay grew by 7.2%, said Alice Haine, personal finance analyst at wealth management firm Evelyn Partners.
