Tuesday 17 February 2026 7:04 am
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Tuesday 17 February 2026 8:04 am
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Labour policies have hit the hiring market. (Image: Getty)
Good morning and welcome back to the City AM liveblog.
The UK unemployment rate has risen again this morning, with fresh data from the Office for National Statistics (ONS) showing the rate had surged to 5.2 per cent in the three months to December 2025.
This was up from 5.1 per cent in the latest quarter and above estimates of a year ago. It came as 6,000 more jobs were shed between November and December 2025.
“The number of workers on payroll fell further in the final quarter of the year, reflecting weak hiring activity, although it is largely unchanged in the latest month,” said Liz McKeown, director of economic statistics at the ONS.
Unemployment has remained the headache Labour hasn’t been able to get rid of.
Last week, Bank of England rate-setter Catherine Mann gave a major warning that minimum wage increases had contributed to youth unemployment.
In an interview with the Sunday Telegraph, Mann said the rise in youth unemployment reflected “disproportionately big increases in the minimum wage for that age group”, rather than signalling a more general collapse in the labour market.
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It came after OECD figures showed the unemployment rate for 16 to 24-year-olds had risen to around 15 per cent, overtaking the EU average for the first time since records began in 2000.
“I think we have to be very careful in the storyline about youth unemployment being the canary in the coal mine for a deeper deterioration in the labour market,” Mann said.
Minimum pay for 21 to 22-year-olds has risen by 33 per cent over the past three years, bringing it into line with the £12.71 hourly national living wage paid to older workers.
The rate for 18 to 20-year-olds has increased by 46 per cent to £10 an hour and is set to rise again to £10.85 in April.
Still, the government looks poised to plough ahead with its mission to align the 18-20 rate fully with the adult rate.
Would this be a move that thrusts the hiring market into even further uncertainty?
Here’s a few of our top stories from yesterday:
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