UK Unemployment Back Up to 5% for Q3

The Office for National Statistics (ONS) has this morning released the latest figures for UK unemployment for July-September 2025.

Unemployment was last over 5% just after the pandemic, it then went down to 3.6% by June 2022 and has been bouncing around the 4% mark during the ‘cost of living’ crisis only to then start climbing again with Labour taking power and last year’s Autumn Budget hitting employers with huge ‘minimum wage’ increases for both young and older workers as well as smashing many medium and larger employers with 15% employers national insurance contributions (NIC).

5% is a post-pandemic high and with nearly 1.7m claiming unemployment benefit, the government’s move last year on employers NIC to fill a ‘blackhole’ has backfired with of course more tax revenue but recruitment down, as expected, unemployment up and therefore, the benefits bill up.

Comment

No doubt the ‘blame the previous government’ card will be played again but these figures will not help the Chancellor with the coming Autumn Budget, an increase in unemployment of 0.9% to 5% since August 2024, is a massive 300,000 more unemployed approximately since August 2024, even when allowing for seasonal adjustments, we are still looking at c.200,000 more than last year.

Smaller business, that currently benefit from Employment Allowance, where no NIC may be payable, are put off from recruitment and therefore restricting future growth due to fears for the Budget, economic uncertainty and of course employers NIC at 15%, which would likely come into play for say 6 or more employees on minimum wage.  Large, medium, and smaller businesses are all being ‘choked off’ from growth.

We do hope there will be some ‘golden nuggets’ in the budget to help the economy grow.