ONS data showed a broad May labour-market deterioration: April vacancies fell to a five-year low, payrolled employment dropped 100,000 and unemployment rose, with youth joblessness climbing to 16.2%, the highest in over a decade.
Regular pay growth slowed to 3.4% in the first quarter, leaving real wages up just 0.1% before higher energy costs feed further into inflation and likely push households back into an income squeeze.
The figures point to elevated business costs and uncertainty already weakening labour demand, even allowing for revision-prone payroll estimates and ongoing quality issues in the Labour Force Survey unemployment data.
For the Bank of England, that deterioration complicates the inflation response: global energy prices still argue for tighter policy, but softer wage growth and rising slack suggest the 2022 wage-price spiral is not re-emerging.
The weaker jobs backdrop also casts doubt on how durable stronger-than-expected Q1 GDP was, with the Iran conflict and domestic political uncertainty seen weighing on hiring, investment and demand through Q2 and Q3.
The UK needs a million tradespeople, yet welfare rules financially penalize apprentices. Why does this 'apprenticeship penalty' still exist?
With youth mental health in crisis, are job schemes just a band-aid on a much deeper societal wound?
As AI dismantles the first rung of the career ladder, what new pathways to success can replace it?
UK Youth NEET Rate Surges to 13.3%: Causes, Policy Responses, and the Urgent Need for Action (2025–2026)
Overview
This report explores the growing challenge of youth disengagement in the UK, focusing on young people who are Not in Education, Employment, or Training (NEET). Using robust data from the Office for National Statistics Labour Force Survey, it highlights a recent rise in NEET rates to 13.3% in 2025. The report connects this increase to deeper systemic issues, such as worsening mental health and disability among young people, which threaten both individual futures and national prosperity. By analyzing these drivers and the effectiveness of current policy responses, the report underscores the urgent need for coordinated action to support and re-engage young people.