"The Office of National Statistics latest report shows unemployment has risen from 4.1% when Labour took office in July 2024 to 5.1% on Tuesday, an increase of around 24%. This is the sharpest rise in joblessness in several years and takes us back to levels last seen during the recovery from the pandemic. Businesses have been hit hard by Labour's increase to employers National Insurance Contributions (NICs) and National Minimum Wage (NMW)."
"The wage increase has been counterproductive for young workers; almost 40% of 18-24-year-olds are now currently out of work. While interest rate cuts and clarity following the Budget may offer some relief, and Government training schemes are welcome, they will take time to deliver. The labour market will continue to be subdued for a prolonged period without more immediate action, such as reconsidering the NIC rise to give businesses the financial headroom they need to cope with rising wages."
Unemployment increased from 4.1% in July 2024 to 5.1%, an approximate 24% rise and the sharpest uptick in several years, returning to pandemic-recovery levels. Businesses report higher costs due to increased employer National Insurance Contributions (NICs) and a higher National Minimum Wage (NMW). The wage rise has been described as counterproductive for young workers, with almost 40% of 18-24-year-olds out of work. Employers cite increased automation and cost pressures as reasons for hiring hesitancy. Interest rate cuts, Budget clarity, and training schemes may help, but more immediate measures such as reconsidering the NIC rise are urged to ease business financial headroom.
Read at London Business News | Londonlovesbusiness.com
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