UK jobless rate rises to nearly four-year high

The United Kingdom’s unemployment rate rose to 4.7% in the three months to May 2025, significantly above market expectations for a steady reading at April’s 4.6% and marking the highest level since the three months ending July 2021.

The increase reflects a broad-based rise in joblessness across all durations of unemployment. Compared to the prior period, the number of people unemployed for less than 6 months, between 6 and 12 months, and over 12 months all saw an uptick, signaling not only new entrants into unemployment but also challenges in reabsorbing longer-term job seekers. On a year-over-year basis, unemployment rose across each of these categories as well, highlighting persistent softness in the labour market.

Despite the rise in unemployment, the overall employment picture showed some resilience. The number of employed individuals rose by 134,000 to 34.13 million—the highest level recorded since February—reflecting gains in both full-time and part-time positions.

This mixed dynamic suggests that while job losses may be rising in some sectors, others continue to hire, potentially supported by a patchy but ongoing economic recovery. Notably, the number of people holding second jobs also increased, now accounting for 3.9% of all employed individuals. This may reflect growing cost-of-living pressures, as more workers seek additional income to offset inflation and stagnant real wages.

Meanwhile, the economic inactivity rate fell by 0.3 percentage points to 21%, indicating that more people are either entering the workforce or actively seeking employment. The decline in inactivity may be a sign of improved confidence in job prospects or financial necessity pushing individuals back into the labour market. However, the simultaneous rise in unemployment suggests that job creation may not be keeping pace with the number of people entering the labour force.

Altogether, the latest figures paint a nuanced picture of the UK labour market: growing employment and falling inactivity signal underlying strength, but the rising unemployment rate—particularly among the long-term jobless—points to lingering vulnerabilities. These conflicting signals are likely to complicate the Bank of England’s assessment of labour market slack and its timing for potential interest rate adjustments.

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