The UK’s unemployment rate rose to 5.1% in the three months to October, official data has revealed.
Younger workers were particularly affected, the Office of National Statistics (ONS) said, with the number of unemployed 18 to 24-year-olds increasing by 85,000, the largest rise since November 2022.
Overall unemployment was 4.1% when Labour took office in 2024.
The ONS said the number of employees on payrolls fell by 38,000 during November to 30.3 million, the biggest fall for five years.
Those receiving unemployment benefits increased to 1.696 million, up from 1.686 million in August.
ONS director of economic statistics Liz McKeown said:
“The overall picture continues to be of a weakening labour market. The number of employees on payroll has fallen again, reflecting subdued hiring activity, while firms told us there were fewer jobs in the latest period.
“This weakness is also reflected in an increase in the unemployment rate, while vacancies remained broadly flat. The fall in payroll numbers and increase in unemployment has been seen particularly among some younger age groups.
“Wage growth slowed further in the private sector, while increasing again in the public sector, reflecting the continued impact of some pay rises being awarded earlier than they were last year.”
Reaction to unemployment increasing to 5.1%
James Cockett, senior labour market economist, CIPD:
“It’s clear the Government needs to take stronger action to support young people in securing valuable training and employment opportunities. While it was positive to see the government announce funding to support apprenticeship starts for under-25s in smaller businesses in the Budget, it needs to go further. It can do this by introducing an Apprenticeship Guarantee for 16 to 24-year-olds, which is supported by many employers.
“Looking ahead to 2026, with redundancies soaring to their highest rate since early 2021 and real wage growth stagnating, it’s clear the government needs to develop a meaningful plan to boost growth. This means working in partnership with employers to boost the investment in skills and technology adoption that’s needed across the economy to improve productivity and living standards.
“The government should also continue to commit to an ongoing tripartite process on key measures in the Employment Rights Bill still to be decided in secondary legislation, to ensure they don’t further hold back hiring. Some measures proposed in the bill could act as a weight on employers who have genuine concerns on how these changes will affect their business. While there have been some positive developments around unfair dismissal there’s still a need for continued consultation, and compromise, to ensure the bill doesn’t reduce employment opportunities.”
Kevin Fitzgerald, UK MD at Employment Hero, said:
“Today’s ONS employment data is the latest demonstration of the UK’s tightening labour market. A decline in the employment rate aligns with Employment Hero’s real-time proprietary data, which shows that employment growth is losing momentum. Our real-time data from businesses around the UK employment growth has slowed significantly, falling from 7.6% in November 2024 to 2.0% in November 2025.
“Sadly, the small increase in vacancy numbers recorded in October hasn’t been maintained. The job remains incredibly tough, and many jobseekers feel stuck – our recent survey found that 42% of UK workers searched for a new job in 2025. The lack of opportunities, combined with the continued rise in inflation, is putting pressure on employers who are also contending with rising costs, such as last month’s minimum wage increase.
“Looking forward, our shows that smaller businesses are more susceptible to economic changes, so creating favourable conditions to encourage further hiring will be crucial to unlocking the full potential of the labour market.”
Karim Fatehi OBE, chief executive, London Chamber of Commerce and Industry:
“Today’s figures show just how fragile the jobs market has become. Redundancies at their highest level outside the pandemic reflect the damaging impact of successive Budgets and rising cost pressures on employers. The London Chamber of Commerce and Industry’s pre-Budget survey found that more than a third of London firms warned redundancies would be unavoidable if employment costs rose further and we are now seeing those warnings become reality.
“Businesses want to invest and create jobs, but without clarity and confidence from government, too many are being forced to pause hiring or make difficult decisions about their workforce. A clear, pro-growth approach that backs business is essential to stabilise employment and support economic recovery.”
Jane Gratton, deputy director of public policy, British Chambers of Commerce:
“The latest data paints a gloomy picture for jobs, opportunities and growth. It reflects what businesses tell us — they are less confident about hiring staff due to sky-high employment costs and a tidal wave of new employment legislation coming down the track.
“While there has been some easing of cost pressures – with average earnings including bonuses slowing to 4.7% in the three months to October – labour costs remain a challenge. Nearly three quarters (72%) of businesses in our latest survey said labour costs are the biggest cost pressure they are facing.
“There is a limit to how much additional cost firms can absorb without an impact on investment and growth. The further increase in unemployment, hitting 5.1% in October, is also a clear sign of the sluggish economy.
“We need a laser like focus on stimulating growth and boosting investment, trade, innovation and skills. The government must work in partnership with business to make 2026 a year of delivery.”