Youth unemployment hits decade high as UK job vacancies dry up

Youth unemployment in the UK has risen to 14.7 per cent, meaning roughly one in seven young people are searching for work but unable to find it, according to the latest figures from the Office for National Statistics. It is the highest rate in more than a decade, and a sobering signal that the labour market's long stretch of strength is fading.

The deterioration in prospects for younger workers comes against a wider backdrop of weakening demand for labour across the economy. While headline unemployment remains low by historical standards, the trajectory has turned, and the burden of the slowdown is falling disproportionately on those at the start of their careers.

Economists have long warned that young people are among the first to feel the effects of a cooling jobs market, because they are more likely to be in temporary or entry-level roles, and because employers facing uncertainty tend to freeze hiring before cutting existing staff. The latest data bears that pattern out.

Vacancies fall, payrolls shrink

The overall unemployment rate stood at 5.0 per cent in the first quarter of the year. Job vacancies dropped to 705,000 in the February-to-April period, the lowest level since early 2021, while the number of payrolled employees fell by around 100,000 over the month to 30.2 million. Each of those figures points in the same direction: employers are pulling back.

Vacancies are a closely watched leading indicator because they reflect employers' appetite to expand. After reaching record highs in the wake of the pandemic, when firms struggled to fill posts, openings have steadily declined for many months. The fall back to levels last seen in early 2021 suggests the era of acute labour shortages is firmly over.

• Youth unemployment at 14.7 per cent, a decade high
• Overall unemployment at 5.0 per cent
• Vacancies down to 705,000, lowest since 2021
• Payrolled employees down 210,000 over the year
• Payrolls fell by around 100,000 in the latest month alone

Ben Harrison of the Work Foundation said the figures showed one in seven young people now seeking work, describing it as the highest rate in more than ten years. Recruitment industry figures pointed to redundancy rates remaining higher than a year earlier as vacancies continued to slide, a combination that leaves new entrants competing for a shrinking pool of openings.

Business groups warned that young people are finding it especially difficult to get a foothold on the career ladder, and called for renewed efforts to close the gap between the employment rate and the government's longer-term target. Apprenticeships, traineeships and targeted hiring incentives have all been floated as potential remedies.

Why young workers bear the brunt

There are structural reasons why downturns hit the young hardest. Without an established track record, school and university leavers rely on entry-level roles that are often the first to be cut when budgets tighten. Many also work in sectors such as hospitality and retail that are particularly sensitive to swings in consumer confidence.

The consequences can be long-lasting. Research consistently shows that periods of unemployment early in a career can depress earnings and job security for years afterwards, a phenomenon economists call scarring. A cohort that struggles to find work now may carry the effects well into the next decade, which is why policymakers treat rising youth unemployment as more than a short-term statistic.

“When you cannot get that first job, you miss out on the experience and confidence that open the next door. The risk is a whole generation starting on the back foot.”

— A labour market policy researcher

Background: a turning point for the jobs market

For much of the period following the pandemic, the UK labour market was defined by scarcity. Employers competed for staff, wages rose briskly and vacancies hit record levels. That dynamic helped push up inflation but also gave workers, including the young, unusual bargaining power.

The picture has now reversed. Higher borrowing costs, weak economic growth and global uncertainty have made firms more cautious, and the cumulative effect is a market that is loosening across the board. The rise in youth unemployment is among the clearest signs that the balance of power has shifted back towards employers.

What happens next

Much will depend on the wider economy. If growth stabilises and confidence returns, hiring could pick up and the pressure on younger workers ease. But with forecasters cautious about the outlook and energy-related risks clouding the picture, a swift recovery is far from assured.

In the meantime, attention is likely to focus on what support is available for those struggling to find work, from skills training to employment schemes. The central question, as the Work Foundation and others have framed it, is what happens to the one in seven young people now looking for work, and whether the country can avoid the lasting damage that previous downturns inflicted on the young.