Unemployment has climbed to a five-year peak as wage growth continues to slow, according to official statistics. The latest figures show the jobless rate rose to 5.2% for the three months ending December, up from 5.1% in the previous quarter, marking the highest level since early 2021 and the strongest outside the pandemic period in more than a decade.
The data also indicate that pay increases are cooling. Regular wages rose by 4.2% in the December quarter, down from a revised 4.4% in the prior quarter, and after adjusting for inflation, real wage growth sits about 0.8 percentage points lower.
Yet there was a silver lining on the employment front: job vacancies ticked up to 726,000 in the three months to January, 2,000 more than the previous quarter. This suggests more people who were previously out of work are actively seeking roles.
ONS statistician Liz McKeown explained that while vacancies have held steady since mid last year, the rising unemployment combined with a stable vacancy supply means the number of unemployed people per vacancy has climbed to a new post-pandemic high. Redundancies are also trending upward.
These developments have particular implications for younger workers. Data show employment challenges are hitting the 16–24 age group especially hard, with youth unemployment rising to over 16%. Experts from ITV News note this heightened vulnerability among young jobseekers.
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But here’s the part that invites debate: with vacancies rising yet unemployment also climbing, what does this say about the balance of power in the labor market? Are employers becoming more selective, or is jobseekers’ hesitation slowing the pace of hires? Share your thoughts in the comments to join the discussion.
