---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/43460478.md"
description: "🚨 The UK is falling into a comprehensive unemployment crisis.UK companies laid off 13,000 workers in June, and another 13,000 in July.The unemployment rate has reached 4.9%. Job vacancies have dropped to 707,000, the lowest level since 2014 excluding the pandemic period.Youth are bearing the brunt of the impact.Youth unemployment stands at 16.1%, the highest since 2014, and for the first time exceeding the EU average.Nearly 1 million people aged 16 to 24 are neither working nor studying. Graduate positions decreased by 33% last year, hitting a low not seen since 2018.All this occurred alongside economic growth.But why is this happening?Hiring has become expensive. The government simultaneously raised employer national insurance and the social minimum wage, while energy bills continue to climb. Companies have stopped replacing departing staff.Wage data tells the same story. Private sector wages grew by 2.8%, the slowest pace since 2020. Public sector wages grew by 6.2%.This is where it gets dangerous. PwC estimates that the youth employment crisis alone costs the UK economy £26bn in output annually and increases welfare spending.The UK's 30-year borrowing cost is nearing 5.45%, the highest level since 1998.Fewer workers mean lower tax revenues, which implies more borrowing is needed at these interest rates."
datetime: "2026-08-18T13:28:15.000Z"
locales:
  - [en](https://longbridge.com/en/topics/43460478.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/43460478.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/43460478.md)
author: "[辰逸](https://longbridge.com/en/profiles/16318663.md)"
---

# 🚨 The UK is falling into a comprehensive unemploy…