Good morning. I\u2019m Karen McVeigh and I\u2019ll be bringing you First Edition alongside Martin Belam and Aamna Mohdin for the next few weeks. If there is anything you would like to see covered in the coming weeks, please hit reply with your suggestions.<\/p>\n
The rate of UK unemployment has climbed to the highest level since the Covid pandemic. The Office of National Statistics (ONS) said on Tuesday that unemployment rose to 5% in the three months to September, up from 4.8% in the previous quarter. Liz McKeown, director of economic statistics at the ONS, said the figures point to a \u201cweakening labour market\u201d, just under two weeks before Rachel Reeves is expected to deliver her second budget.<\/p>\n
The number of people on the payroll are falling, with almost 1.8 million classing themselves as unemployed. Part of the rise is being driven by youth unemployment. For today\u2019s newsletter, I talked to Phillip Inman, the Guardian\u2019s senior economics writer, about what\u2019s really happening but first, today\u2019s headlines.<\/p>\n
Five big stories<\/p>\n
BBC | MPs and BBC staff members have called for Robbie Gibb to be removed<\/a> from the corporation\u2019s board as outgoing director general Tim Davie hit out at the \u201cweaponisation\u201d of criticisms of the broadcaster.<\/p>\n Politics | Downing Street has launched an extraordinary operation to protect Keir Starmer<\/a> amid fears among the prime minister\u2019s closest allies that he is vulnerable to a leadership challenge in the wake of the budget.<\/p>\n Welfare | Millions of \u201cWaspi women\u201d have been given fresh hope<\/a> that they might receive compensation after the UK government announced it would revisit a decision to deny them payouts.<\/p>\n Environment | Protesters and security guards tussled at the Cop30<\/a> climate talks late on Tuesday night, when a group of Indigenous and non-Indigenous people stormed the conference centre in Bel\u00e9m.<\/p>\n Social care | Private companies operating care services in just three regions of England have made more than \u00a3250m in profits<\/a> in three years.<\/p>\n In depth: \u2018The pre-budget jitters are real\u2019Rachel Reeves during a pre-budget press conference. Photograph: Justin Tallis\/Reuters<\/p>\n The rising unemployment rates could affect the budget, interest rates and pay. Rachel Reeves will need to avoid depressing the economy and putting more people out of work as she delivers what is expected to be a tax-raising budget next month. She will need to address joblessness, following on from last autumn\u2019s budget which was heavily criticised by businesses hit by the rise on national insurance they warned would raise the cost of employing.<\/p>\n Are the unemployment figures really that bad?<\/p>\n \u201cYes they are as bad as they seem, particularly for young people,\u201d says Phillip Inman. Hiring has stalled in part due to pre-budget speculation over tax rises, while earlier this month, the Bank of England warned that investment, consumer spending and the housing market had all stalled in the run up to Reeves\u2019s speech on 26 November.<\/p>\n \u201cThe pre-budget jitters are real,\u201d Phillip says. \u201cPeople have got a sense that the budget is getting bigger and bigger in its scope and what it might do, who it might tax and the extent to which it might tax them.\u201d<\/p>\n He adds that \u201ca growing level of uncertainty\u201d over recent months, \u201cwhich means people stop investing, stop hiring, stop expanding. You are living with a stasis, a stagnant economy, just waiting for the government to make its next move.\u201d<\/p>\n Why are young people so badly affected?<\/p>\n Underlying the weakening labour market are a couple of worrying trends. One, that much is being driven by youth unemployment. In October, Liz McKeown of the ONS said we were seeing different patterns among age groups, adding \u201cthe increase in unemployment was driven mostly by younger people.\u201d<\/p>\n The combination of a dearth of part-time work, caused by the rise in national insurance employers pay, and the rise of AI have created problems for young people, Phillip told me.<\/p>\n \u201cOne of the really bad things Labour did at the last budget was that, not only did they raise national insurance contributions, which raised the cost of employing someone, but also lowered the salary at which they start paying it. This caught people who work part-time. Most of the time, if you employed someone part-time, they fell below the threshold.\u201d<\/p>\n Labour \u201cshot themselves in the foot\u201d here, by completely underestimating the impact of the national insurance raise on young people who enter the workforce via part-time work, Phillip says. These young people, who often start off in part-time work, often in the retail, leisure or hospitality sector \u201care now unemployed\u201d, he says.<\/p>\n And then there is AI. \u201cWe don\u2019t know how many people are affected,\u201d Phillip says. \u201cIt might not impact leisure or hospitality, that need a person to do the meet or greet or sell something, but in areas like book-keeping, your entry level into accounting, AI can do those jobs. If you are a department of 10 and the company is growing, you get technology to do those jobs.\u201d<\/p>\n On Tuesday, the work and pensions secretary, Pat McFadden, acknowledged \u201cthere are challenges in the Labour market\u201d but insisted the \u201cBritish economy is still generating jobs.\u201d McFadden said he was \u201cconcerned by the growth\u201d in the number of young people not in employment or training over the past five years.<\/p>\n What other issues are affecting young people?<\/p>\n Alongside the rise in youth unemployment, there are rising levels of ill health<\/a>. More than a million young people are not in education, employment or training. And more than a quarter of 16- to 24-year-olds who are not in education, employment or training are inactive because of disability and illhealth<\/a>, according to the Resolution Foundation. That figure has more than doubled since 2005.<\/p>\n Much of the rise in the number of \u201ceconomically inactive\u201d adults that Labour would like to help back into work is being fuelled by young people. Between 2015 and 2024, the number of people with work-limiting conditions rose by 900,000, or 32%, for 50- to 64-year-olds. For those aged 16 to 34, the rise was 1.2 million, or 77%.<\/p>\n Phillip says: \u201cWe have this double whammy, from tight government spending and a health issue that lingers. Not only do we have a lot of people unemployed because they couldn\u2019t find work in the last 18 months, we also have a lot of young people off with mental health issues.<\/p>\n His own personal view, is that the mental health crisis among the young stems from Boris Johnson\u2019s handling of the Covid pandemic, and the unrecognised impact that period had on young people.<\/p>\n What can be done to help youth unemployment?<\/p>\n \u201cWe\u2019ve gone from a minimum wage worth about 40% of the average wage to one that is 60% of the average wage,\u201d Phillip says, adding that there is an argument for keeping it as it is and not raising it further. \u201cThe idea would be to say, OK we protected the low paid through the pandemic and cost of living crisis. Now its time for it to rise just in line with prices, and that could also help take the heat from Reform suggesting it shouldn\u2019t rise.\u201d<\/p>\n Because high national insurance and a high minimum wage makes youth unemployment high, employers could pivot to a different model, such as the one in France, where it takes a lot to break into work, but the wages are higher, Phillip says.<\/p>\n \u201cWe\u2019ve been a country where we pay next to nothing when you first get a job, but if you work hard and go up the scale you do OK. That has made the UK an attractive country for young people from the continent.\u201d<\/p>\n \u201cThere is one argument, to say, that Britain could be like France. France has a very high cost of employing someone, which they have always had, and the price of that is high youth unemployment. It takes a lot to break into a job, with many years of training, getting more qualifications, doing jobs for free, but you get on. It\u2019s not a trade union way of doing things, because trade unions like to have structures that protects their workers who have already acquired skills.\u201d<\/p>\n Will things get better?<\/p>\n Many experts say that, because of the unemployment figures, the Bank of England will almost certainly<\/a> cut interest rates in December. The bank will meet next month to judge the health of the economy and what the cost of borrowing should be. A cut in December, says Phillip, now looks \u201cnailed on\u201d.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Our morning email breaks down the key stories of the day, telling you what\u2019s happening and why it matters<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n \u201cThings will get better, most of the forecasters say. We\u2019re expecting the Office for Budget Responsibility to say next year is going to be difficult as everyone readjusts to the expected tax rises. But then the economy will start to grow more strongly, unemployment will fall.\u201d<\/p>\n One reason to be hopeful, Phillip concludes, is that the Bank of England \u201cwill come to the rescue\u201d.<\/p>\n \u201cInterest rates are at 4%. We\u2019re expecting them to fall in December and carry on falling next year.\u201d<\/p>\n What else we\u2019ve been readingSammy Gecsoyler. Photograph: David Levene\/The Guardian<\/p>\n Sammy Gecsoyler\u2019s <\/a>explainer of the perplexingly huge protein shake industry taught me that there is a shortage of whey, the once-discarded liquid byproduct of cheese-making used in most protein powders. Martin<\/p>\n Nicole Lipman, a writer and editor at n+1, examines<\/a> how France is fighting fast fashion and in particular, how its citizens and MPs have registered their opposition to the Singapore-based, ultra-fast fashion company Shein, with petitions, protests, investigations, fines and regulation. She wishes others would follow. Karen<\/p>\n Lucy Knight looks at a new documentary<\/a> that reveals how parents were routinely offered surgery for intersex children born with atypical genitalia in the 70s, often with tragic long-term results. Martin<\/p>\n My colleague Eromo Egbejule, the Guardian\u2019s West Africa correspondent, has written a shocking story<\/a> of how a young female TikTok influencer, Mariam Cisse, has been publicly executed by suspected jihadists in Mali, underlining the erosion of state control in the West African country which is in the grip of an insurgency. Karen<\/p>\n Podcast producer Willard Foxton<\/a> has a new blog. The first post is about the perilous state of the industry for limited-series podcasts, but it opens with a quite brilliant anecdote about a gallery visit. Martin<\/p>\n SportSam Kerr of Chelsea celebrates scoring her team\u2019s sixth goal during their Women\u2019s Champions League match against St P\u00f6lten. Photograph: Christian Bruna\/Getty Images<\/p>\n Football | Sam Kerr hit a double Chelsea breezed past Austrian outfit St P\u00f6lten<\/a> to seal their second Women\u2019s Champions League victory of the campaign.<\/p>\n Cricket | Ollie Pope is poised to stay at No 3<\/a> in the batting lineup as England focus on continuity for the looming Ashes series. <\/p>\n Rugby | Steve Borthwick has called on his side<\/a> to prepare for \u201cpain and suffering\u201d if they are to end their losing run against the All Blacks, demanding the most selfless England team in history in the showdown on Saturday.<\/p>\n The front pages Photograph: Guardian<\/p>\n The Guardian leads with \u201cNo 10 on alert amid fears of challenge to leadership\u201d. The Financial Times says \u201cUnemployment increase deals fresh blow to Reeves before crunch Budget\u201d, while the Times goes with \u201c1m more on benefits with no need to seek work\u201d. Top story at the Mail calls it \u201cAnother day in Starmer\u2019s socialist paradise\u201d, while the Telegraph continues to examine the fallout at the national broadcaster with \u201c\u2018We are the very best of society\u2019 \u2013 Defiant Davie blames BBC\u2019s enemies for bias scandal\u201d. The i paper says \u201cFresh hope for Waspi women as Labour promises to look again at compensation\u201d. On the Harvey Willgoose murder, the Mirror says \u201cI\u2019ll meet son\u2019s killer\u201d. \u201cShake up as show returns\u201d \u2013 that was the Sun\u2019s take on ITV\u2019s I\u2019m a Celebrity\u2026 Get Me Out of Here.<\/p>\n Today in FocusLaura Murphy is a professor of human rights and contemporary slavery at Sheffield Hallam University. Photograph: Christopher Thomond\/The Guardian<\/p>\n How China is trying to silence UK academics<\/p>\n How entangled are China and the UK universities sector? A professor explains in 2024 that strange things began to happen<\/a>. Amy Hawkins reports.<\/p>\n Cartoon of the day | Ben Jennings Illustration: Ben Jennings\/The GuardianThe Upside<\/p>\n A bit of good news to remind you that the world\u2019s not all bad<\/p>\n Wythenshawe FC Vets play against South Liverpool FC at Hollyhedge Park. Photograph: Joel Goodman<\/p>\n Imagine rocking up for your Sunday league over-35s match to find yourself up against Emile Heskey, Joleon Lescott, Papiss Ciss\u00e9 and a side with nearly 1,900 Premier League appearances between them. That could happen if you are playing against<\/a> Wythenshawe FC.<\/p>\n Former Manchester City player Stephen Ireland was the first on board. \u201cI came down in pre-season just because I love playing football,\u201d Ireland says. \u201cI love the fitness side of things. I invited some of the others and slowly but surely everyone wants to play.<\/p>\n \u201cI didn\u2019t want it to be something where 15 of us ex-pros came in and took over, I want a good mix with the old vets lads. It\u2019s a nice humbling experience to interact with fans as well. It\u2019s great to give back and the club have been so nice to me. We\u2019re all local as well.\u201d<\/p>\n