Young People Bearing the Brunt of UK Jobs Downturn, Thinktank Warns
The Resolution Foundation has highlighted that young people aged 16-24 are bearing the brunt of the UK jobs downturn, with the number of NEETs (those not in education, employment or training) nearing one million. Official data expected this week is projected to show that the unemployment rate in October will rise slightly to 5.1% from 5.0% in September, according to the Office for National Statistics (ONS).
The thinktank attributes this rise to a "jobs deficit," pointing to hiring reductions across both public and private sectors, impacting graduates and non-graduates alike. The working-age employment rate has declined by about one percentage point since October 2020 to September 2025, translating to roughly 415,000 fewer workers. This downturn is driven by unemployment rather than inactivity alone.
Additionally, the UK's youth employment ranking has worsened among OECD countries, falling to 27th out of 38 members per a recent PwC report. Despite these challenges, the participation rate remains strong at 79.5%, slightly above the pre-pandemic figure of 79.2% and close to a record high of 79.9% seen in 2023.
Some economic forecasters expect unemployment could peak near 5.5% next year due to factors including higher taxes, weak consumer confidence, and sluggish growth. Inflation is anticipated to ease slightly from 3.6% to 3.5% in November. City economists expect the Bank of England's Monetary Policy Committee to cut interest rates from 4% to 3.75%. Bank of England Governor Andrew Bailey is predicted to support this rate cut, having previously voted to hold rates steady at the last meeting.
This week will see key data releases, beginning with the inflation reading on Wednesday followed by the Bank of England's decision on Thursday.
