Bold headline: Unemployment climbs to its highest level in nearly five years, reshaping the job market landscape.
Unemployment has risen again, reaching 5.2% in December—the highest rate seen since the three months ending January 2021, according to official figures from the Office for National Statistics (ONS). This marks a notable uptick from 4.1% when Labour took office in 2024, a period framed by promises of economic growth. In practical terms, finding work is more challenging than it has been in some time.
More people without jobs are actively seeking employment, and the ratio of unemployed people per job vacancy has hit a new post-pandemic high, the ONS reports. Despite this, the number of job openings has shown little movement in recent months.
Redundancies are on the rise, the ONS adds. This comes alongside a CIPD survey indicating that more than a third of employers say they are reducing hiring due to the new workers’ rights provisions.
In related context, the Employment Rights Act, enacted in December, now guarantees rights such as parental leave and sick pay from the first day of a job.
The ONS also cautions readers to interpret monthly changes in unemployment and vacancies with care, citing concerns about data reliability in these figures.
Wage growth has slowed alongside the unemployment shift, adding another layer of complexity to the economic picture.
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