The unemployment rate increased to 5.2 per cent in the three months to December, compared with 5.1 per cent in the period to November, according to the Office for National Statistics (ONS).The figures released on Tuesday will come as a blow to Chancellor Rachel Reeves, who has pledged to improve opportunity and rebuild the economy.It’s the highest level of unemployment the UK has seen since January 2021, with the number of pay-rolled employees in the UK falling by 121,000 (0.4 per cent) last year.This latest release is the latest sign that the jobs market is continuing to deteriorate.Pay growth was particularly weak in the last quarter of 2025.UK regular pay growth slowed to 4.2 per cent in the three months to December, and rose by 0.8 per cent in real terms after accounting for CPI inflation.Reacting to the figures, ONS Director of Economic Statistics Liz McKeown said: “The number of workers on payroll fell further in the final quarter of the year, reflecting weak hiring activity, although it is largely unchanged in the latest month. “Over the same period the unemployment rate increased, with data showing that more people who were out of work are now actively looking for a job.“The number of vacancies has remained broadly stable since the middle of last year. Alongside rising unemployment this means that the number of unemployed people per vacancy has increased, reaching a new post-pandemic high. “Meanwhile, redundancies are also showing an upward trend.“Private sector wage growth continues to slow and is at its lowest rate in five years. “Public sector pay growth also slowed in the latest period but remains elevated, still affected by some pay awards being implemented earlier in 2025 than 2024, although this effect has now started to diminish.”The release follows confirmation last week that a sharp rise in joblessness among young people had pushed the UK above the youth unemployment rate of the European Union.It’s the first time that’s happened in a quarter of a century.This latest blow comes after months of complaints from businesses that the Chancellor has increased employment costs through rises in national insurance contributions and the minimum wage.It was recently revealed that 707,000 people with a university degree are out of work and claiming one or more benefits at the end of last year — a 46 per cent increase compared with pre‑lockdown levels in 2019.The shadow business secretary accused the Labour government of “creating a jobless generation” through its policies. Andrew Griffith said the latest figures reflected the impact of what he called a “zombie government” lacking a growth plan. He argued that Labour’s approach to taxation, economic policy and its Employment Rights Bill was discouraging firms from hiring. Mr Griffith said only the Conservatives would reduce regulation, cut taxes and strengthen the economy to “get Britain working again.”MORE TO FOLLOW
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