𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Britain’s unemployment rate has risen to within one recentage point of the European Union’s in a major blow to the Chancellor Rachel Reeves. The gap between the two is the closest since the launch of the European single currency, The Telegraph reports, citing ONS data.

The rate of UK unemployment increased to 5.1% in the three months to October last year, the highest since January 2021 when Britain was still in the midst of the Covid-19 pandemic. Meanwhile, the latest Eurostat figures for October suggested joblessness across the bloc was at 6% and at 6.4% across the smaller eurozone.

The figures will make for grim reading in Number 11 given that UK unemployment has been markedly lower in the decades since the EU was formed, when employment at one point reached double figures.

The EU unemployment rate at 10% for much of 2015, almost double that seen in the UK (5.5%).

Critics have blamed Labour’s policies for fuelling the rise in unemployment, with the rise in employer National Insurance contributions in Ms Reeves’ 2025 Autumn budget a particular focus of criticism.

The Government argued that tough decisions had to be made to balance the nation’s finances, blaming Tory mismanagement of the economy over its 14 years in power.

However, the increase in payroll costs led many businesses to warn that it would mean them having to reconsider recruitment plans.

According to tax data, payrolled employment has decreased by 187,000 since the move was announced in October 2024, the newspaper reports.

Martin Beck, chief economist at WPI Strategy said the country is becoming “more sclerotic, more interventionist, slower growing”, adding: “We are raising the cost of employing low-skilled workers by more than in Europe – that is not helping”, calling it a “shame”.

It comes as youth unemployment is still high, reaching 16% in October, and Labour’s marked increase in the National Living Wage has been cited as a contributing factor by some analysts, as the higher costs of hiring younger people may put off some employers.

A Government spokesperson said the jobs market remained strong, pointing to figures from the Labour Force Survey put out by the ONS.

“There are over 350,000 more people in work this year with the rate of inactivity at its joint-lowest in over five years,” they told the Telegraph.

“To address the unemployment challenge this government inherited, we are investing £1.5bn to deliver 50,000 apprenticeships and 350,000 new workplace opportunities for young people.

“Alongside this, Alan Milburn’s investigation will help us understand the root causes to youth unemployment.”