Labour Market
5 articles tagged with this topic.
Bank of England Monetary Policy Report – February 2026
The MPC voted 5–4 to hold Bank Rate at 3.75%, with four members preferring a 0.25pp cut, as CPI inflation (3.4% in December) is projected to fall close to the 2% target by Q2 2026, largely due to lower energy bills helped by measures in Budget 2025. The Bank signals further cuts are likely but will be a closer call, given easing wage growth and a loosening labour market alongside lingering services inflation and administered price effects. Ofgem’s price cap is expected to drop in April to £1,616 from £1,758, and private-sector pay growth has moderated toward c.3–4%.
Minimum wage rises to £12.71 an hour as firms warn of impact
The UK National Living Wage for over-21s has risen by 50p to £12.71 per hour, with about 2.7 million workers set to benefit. Rates for 18–20-year-olds rise to £10.85 and for under-18s and apprentices to £8. Businesses warn higher wage bills, alongside other cost pressures, may force price rises, staff cuts or closures, while the Low Pay Commission says past rises have not significantly hurt jobs.
Ministers look at slowing plan to increase minimum wage for younger UK workers
UK ministers are considering slowing the timetable to equalise the minimum wage for younger workers after youth unemployment rose to 16.1% — the highest in more than a decade and now above the EU average. Retail and hospitality employers say faster rises plus higher employer National Insurance contributions are deterring hiring, but PM Keir Starmer insists the manifesto commitment stands and the April uplift will proceed: the 18–20 rate will rise by 85p to £10.85, while the 21+ rate will rise by 50p to £12.71.
UK unemployment rate steady at 5.2% (3 months to Jan 2026), highest since early 2021
The UK unemployment rate held at 5.2% in the three months to January 2026, the highest since early 2021 and a touch below expectations. Unemployment rose by 37,000 on the quarter to 1.869 million, while employment increased by 84,000 to 34.31 million, the employment rate ticked up to 75.1%, and economic inactivity fell to 20.7% (down 99,000 to 8.999 million). Wage indicators show easing momentum (ex‑bonus pay growth at 3.8% y/y) and vacancies edged down to 721,000.
UK youth labour market (Nov–Jan 2026): unemployment highest since 2014; vacancies down
ONS data for Nov–Jan 2026 show UK youth unemployment has risen to 16% (up from 14.5% a year earlier), while the youth employment rate is 51.3%. Among those not in full‑time education, unemployment is at its highest since 2014 (14.5% for 16–24s and 14.1% for 18–24s). Vacancies fell about 1.2% to 721,000 and the unemployed‑to‑vacancy ratio increased from 2.6 to 3, signalling a looser, more competitive labour market.