The unemployment rate has increased again – to the highest level in nearly five years, according to official figures.
The jobless rate ticked up to 5.2% in December, the highest since the three months up to January 2021, data from the Office for National Statistics (ONS) showed.
The figure had stood at 4.1% when Labour took office in 2024, promising economic growth.
It means getting a job is even harder than before.
More out-of-work people are now actively looking for a job, while the number of unemployed people per job vacancy is at a new post-pandemic high, the ONS said. Though there’s been little change in the number of job openings over the last few months.
Redundancies are also increasing, the ONS added.
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Not everyone has the same unemployment rate; those aged 18 to 24 saw their unemployment increase to 14% from 13.7%.
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The ONS, however, has continued to advise caution when interpreting changes in the monthly unemployment rate and job vacancy numbers over concerns about the reliability of the figures.
Why?
It comes as more than a third of employers say they are cutting hiring due to the new workers’ rights, according to a survey from the Chartered Institute of Personnel and Development (CIPD).
The Employment Rights Act, which became law in December, guarantees things like parental leave and sick pay from the first day of a job.
It also became more expensive to employ staff due to the rise in employers’ national insurance contributions in April.
Gulf in private and public sector wage growth
At the same time, wage rises have slowed and the gulf between the private and public sector increases remained.
Typical annual earnings rose 7.2% for the public sector and 3.4% for the private sector. This higher public sector figure is due to some pay rises being issued earlier in 2025 than in 2024.
Overall, pay rose 4.2% in the three months to December.
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