Youth unemployment is at the highest level since the Covid pandemic, as younger people bear the brunt of a worsening slowdown in the UK jobs market. Excluding the peak recorded during the autumn of 2020, when the country was entering the second pandemic lockdown, the jobless rate for 16 to 24-year-olds running at 15.3% is at the highest level in a decade.
Britain is increasingly becoming an "unattractive" environment for businesses seeking to hire permanent staff, according to a stark warning from recruitment giant Hays. The firm attributes this shift to mounting wage pressures and recent tax hikes, which are compelling companies to explore automation and offshoring strategies. Hays, one of Europe's largest recruitment agencies, has previously voiced concerns regarding weaknesses across the global jobs market. However, it highlighted specific challenges within the UK that are diminishing its competitiveness as a place to work.
On one level this data shows a stable labour market performing as expected - albeit not particularly strongly. Unemployment is holding steady and in line with expectations, while wages continue to rise faster than inflation. However, underneath that there are some worrying signs. Vacancies have fallen by 10,000 in the quarter to August, a 38th consecutive fall, and is less than half the number of people currently claiming unemployment benefits.
Britain has recorded the steepest decline in hiring intentions of any major European economy, as employers struggle with the fallout from last autumn's £26bn payroll tax raid and brace for another squeeze in the Chancellor's November Budget. Data from recruiter ManpowerGroup UK shows the UK labour market is slowing at a pace unmatched elsewhere in Europe. The margin has since collapsed to just 11 points, marking a 17-point fall over the past year.
